For this economics example, let’s focus on the apartments for rent in the Calgary market. If we assume that this market is in equilibrium to begin with, then we can designate equilibrium price and quantity with P* and Q* respectively. Notice that in this market there is neither a shortage nor a surplus, the market is in equilibrium. For this example, I am also assuming that the good in question is a normal good, not inferior.
Now if we have a change in people’s income --- the economy gets better or income tax goes down --- everything else equal we will see an increase in demand. Remember that an increase in demand results in a rightward shift of the demand curve. As soon as the demand curve shifts to the right, we are no longer in equilibrium at our current price and quantity (P* and Q*).
is this what u need
