Friday, July 22, 2011

Supply and Demand at Iowa City Animal Center

The Daily Iowan recently reported that the Iowa City Animal Center is reducing the prices for adopting cats and dogs. Why? You guessed it - supply and demand. Specifically, there has been an increase in the number of cats and dogs at the animal center (i.e. an increase in the supply of cats and dogs). The Supply and Demand model predicts that as the supply of a good/service increases (or as I say in class - shifts to the right) the market equilibrium price falls, which is exactly what is happening at the Iowa City Animal Center.

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