The supply and demand model shows how the price of the shares of a new stock changes in a market.
a. Describe and interpret each curve.
b. Which part of the graph represents a surplus? a shortage? Explain your reasoning.
c. The curve intersects at the equilibrium point, which is where the number of shares equals the quantity demanded. Suppose that demand for the shares suddenly increases, causing the entire demand curve to shift up. What happens to the equilibrium point?