New Food Trucks Enter
The question
The market for street tacos in the city of Larenza is initially in equilibrium. Attracted by healthy profits, many new food-truck operators obtain permits and begin selling street tacos in the city. Show the effect of this entry on the market for street tacos, assuming all else is held constant. Show the effect on the Supply and Demand graph.
Drag a curve, or use the arrow buttons. Want the free-play version with every control? Open this graph in the sandbox.
New Food Trucks Enter: the worked answer
On the Supply and Demand graph, Supply shifts right.
Why Supply shifts right
The number of sellers is a determinant of supply, and the entry of many new food-truck operators increases the number of firms selling street tacos. At every price, more tacos are now offered for sale, so the supply curve shifts to the right. Consumers' incomes, tastes, and the prices of related goods are unchanged, so the demand curve does not move.
What happens to the equilibrium
The equilibrium price of street tacos falls and the equilibrium quantity increases.
The mistake students make on this one
Some students shift supply left instead, thinking that more trucks competing means each one sells less. The graph is the whole market, not one truck: adding sellers raises the total quantity offered at every price, so market supply moves right.
On exam day
Entry and exit of firms is a supply determinant, so count sellers rather than sales; once supply moves, the resulting price change simply slides buyers along a fixed demand curve.
How this is graded
The checker reads every curve's position before and after your answer. You are marked correct only when Supply shifts right and every other curve on the Supply and Demand graph stays where it started — the same standard an AP reader applies to a drawn graph: the right shift, and nothing extra. There is no AI involved; the rubric is the geometry.
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