Supply and Demand in California

I came across the following graph:


(Click to embiggen)

Both the supply curve for labor in the state of California and the demand curve for housing in California are made up of the states residents.

In general, if you increase the supply of something, all else being equal you bring down its price. On the other hand, if you increase the demand for something, all else being equal you increase its price. The graph above suggests that in California, two things have happened. One is that the supply of labor has increased more rapidly than its demand. Conversely, the demand for housing has increased more rapidly than its supply.

Tags: , , , Comments (25) | |