Figure 2-1: Pork market equilibrium

p, $ per kg

D
0
Q, Million kg of pork per year

Figure 2-2: Impact of a demand shift

p, $ per kg

$3.50
$3.00

e2
e1

D2
D1
0

220 228

232

Excess demand = 12
Q, Million kg of pork per year

Figure 2-3: Impact of a supply shift

S2
S1

p, $ per kg

e2
$3.55
$3.00

e
1

D
0

205 215 220

Excess demand = 15
Q, Million kg of pork per year

Figure 2-4: Labor market equilibrium

w, Wages per hour

W*

D
0

L*
L, Hours worked per year

Figure 2-5: Labor market with

minimum wage

S
Minimum wage, price floor

W
w, Wages per hour

W*

D
0

Ld

L*
Unemployment
L, hours worked per year

Ls

Figure 2-6: Gasoline price cap

S2

p, $ per gallon

S1

e2

p2

p1 = p

D
0

Qs

Q2

Q1 = Qd

Excess demand
Q, Gallons of gasoline per month

MIT OpenCourseWare
http://ocw.mit.edu

14.01SC Principles of Microeconomics

Fall 2011

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