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Here is a summary of the changes to equilibrium price and quantity that result from changes in either supply or demand. Do not try to memorize all of this! The best way to practice is to visualize the changes in the supply and demand curve and the resulting changes in price and quantity. Changes in supply result from changes in factors affecting producers, such as production costs, technology, or prices of goods that are related in production. When supply changes, price and quantity change in the following manner:
Changes in demand stem from changes in factors affecting consumers, such as household tastes, income, wealth, or price of goods (that are either substitutes or complements in consumption). When demand changes, price and quantity change as follows:
For better understanding about changes in equilibrium, try the following series of Active Graph exercises:
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