
Figure 2.7 Effects of a Fall in the Demand for Tomatoes
After a salmonella outbreak, the demand for tomatoes decreases, causing a leftward shift of the demand curve from
D1 to
D2. This fall in demand results in a new equilibrium point
E2, which is lower than the initial equilibrium point
E1. The equilibrium quantity falls from
Q1 (400 pounds) to
Q2 (150 pounds), and the equilibrium price falls from
P1 ($3) to
P2 ($1.75).