Price changes
When non-price factors (like taxes or weather) change, they can shift demand or supply.
For example, if the government adds a tax on cigarettes, the supply decreases (moves left).
This makes the price go up (from P1 to P2) and the number of cigarettes sold go down (from Q1 to Q2).
If supply moves left, prices go up because there’s less to sell — like when bad weather reduces crops.
If supply moves right, prices go down because there’s more to sell — like when farmers get subsidies or the weather is good.
When demand increases (moves right), prices and sales both go up.
For example, if people earn more money or see good ads, they buy more things — like new cars — so prices rise (from P1 to P2) and more are sold (from Q1 to Q2).
When demand decreases (moves left), both price and sales go down.
For example, if people lose jobs or prefer cheaper products, they buy less — like fewer helium balloons — so the price drops (from P1 to P2) and fewer are sold (from Q1 to Q2).
