First, it is determined whether the event moves the supply curve, the demand curve, or both.

Second, determine the direction in which the curve moves.

Third, explain how this movement changes the equilibrium price and quantity with the supply and demand diagram.

The balance between supply and demand means that the market of all products produced by producers or manufacturers happens to be demanders, and the required quantity reaches the balance between supply and demand. If only a part of the products produced by producers are sold, it means that supply exceeds demand and products need to be reduced. If all the products produced are far less than the quantity required by the buyer's market, that is, the demand exceeds the supply, the products need to be raised in price.

The influence of price control on the balance between supply and demand

1, control is a way to achieve through the potential of violence, and its core strength is violence; The free market is realized through wealth, and its core strength is wealth. The ultimate source of power is violence, wealth and knowledge, in which violence is the lowest level of power and can only be used for coercion, wealth is the power of medium quality and knowledge is the power of the highest quality. From the perspective of the quality of power, the effect of regulation is not as good as that of free market, that is, the potential of violence is not as good as wealth. The original supply curve is SS, the demand curve is DD, the balance point between supply and demand is E, the corresponding equilibrium price is PE, and the equilibrium demand is QE.

2. The highest price control affects the supply curve. If the regulated price stipulates that the maximum price limit is PB, since PB is greater than the equilibrium price PE, it has no influence on the equilibrium point E, the equilibrium price is still PE and the equilibrium supply is QE. If the regulated price stipulates that the highest price is PA, because PA is less than the equilibrium price PE, the supply will be reduced from PE to PA, and the demand will rise from PE to PC, and the demand will be greater than the supply, which will cause a shortage of goods. The shortage size is line segment AC. The lowest price control affects the demand curve. If the regulated price stipulates that the lowest price is PB, because PB is greater than the equilibrium price PE, the new price becomes PB, the demand from QE to QD drops, and the supply from QE to QB rises, resulting in oversupply. The remaining size is BD line. If the regulated price stipulates that the lowest price is PA, it has no effect on the equilibrium point E, the equilibrium price is still PE and the equilibrium demand is QE.