What changes have occurred in the relationship between supply and demand?

"Supply" refers to the position of the supply curve, while "supply" refers to the quantity that the supplier wants to sell. In this example, the supply has not changed, because the weather has not changed the sales desire of the enterprise at any given price. On the contrary, hot weather will change consumers' desire to buy at any given price, thus moving the demand curve. The increase in demand leads to an increase in equilibrium prices. As the price rises, the supply will increase. The increase of supply shows the change of supply curve.

In a word, the movement of supply curve is called "supply change" and the movement of demand curve is called "demand change". The movement along the fixed supply curve is called "change of supply", while the movement along the fixed demand curve is called "change of demand".

The change of supply assumes that in another summer, the earthquake destroyed several ice cream factories. How does this incident affect the ice cream market? To answer this question, we follow three steps.

1. earthquake impact supply curve. The earthquake changed the quantity of ice cream produced and sold by enterprises at any given price by reducing the number of sellers. The demand curve has not changed, because the earthquake has not directly changed the amount of ice cream that families want to buy.

2. The supply curve moves to the left, because at any price, the total amount that enterprises are willing and able to sell is reduced.

3. The movement of the supply curve makes the equilibrium price rise and the equilibrium quantity decrease. Because of the earthquake, the price of ice cream went up, but the sales volume decreased.

Example: both supply and demand are changing. Now suppose the weather is hot and the earthquake happens at the same time. In order to analyze the combination of these two events, we still follow three steps.