Illustrate economic growth. The PPC will shift out with an increase in the quantity of resources an increase in the quality of resources technological improvements 2. Use a supply and demand graph to illustrate and explain the process by which markets adapt to prices that are above the equilibrium level. When the price is above the equilibrium price, the quantity supplied will exceed the quantity demanded. The excess supply results in unsold inventories.
Sellers have sales and cut the price to eliminate the inventories.
This continues until the quantity demanded equals the quantity suppplied at the equilibrium price. Use a graph to illustrate and explain the impact on equilibrium price and quantity that results from an increase in supply. An increase in supply is a rightward movement of the supply curve. This puts downward pressure on price while the equilibrium quantity increases. A change in demand and the causes of a change in demand.