Interactive supply and demand graph

Move the demand and supply curves to see how the equilibrium price and quantity respond, with consumer and producer surplus shaded. Switch on a price control to see the shortage a ceiling causes or the surplus a floor causes.

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Questions students ask

What happens when demand increases?

The demand curve shifts right. At the old price there is a shortage, so the price rises until a new equilibrium is reached with a higher price and a higher quantity.

What is a price ceiling?

A legal maximum price set below the equilibrium. Buyers want more than sellers offer, so it creates a shortage.

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