How would the equilibrium price and quantity for laptops change if there is a sudden shortage in computer processors? Explain your answer using a graph.

Question

How would the equilibrium price and quantity for laptops change if there is a sudden
shortage in computer processors? Explain your answer using a graph.

Answer 1

The graph most typically shows quantity (dependent variable) as a function of price (independent variable).  Using this function, when there is a sudden shortage of computer processors, there will be a lower quantity available (and sold) for laptops at the same price.  The curve shifts down.

 

However, in this example, price can be the dependent variable and quantity the independent variable.  When considering price as a function of quantity sold (or available to be sold). a sudden shortage of computer processors means that that the curve shifts up (higher price for the same number sold).  This graph is more easily understood.

Answer 2

This clearly affects supply. It would contract supply & shift the supply curve up. You'd have a higher price and lower quantity as equilibrium.