the demand curve is steep at q* when consumer cannot switch in the short run to an alternative product after the price p* increases. Water and electricity are examples of such products essential to today's consumer.The supply curve is steep at q* when industry cannot supply more of the product unless it incurs significant additional cost,causing a sharp rise in p*.This situation occurs when the industry is operating at full supply capacity and demand for the product increases sharply. At this point,the industry must increase its cost (e.g.,from capitalizing additional machinery or hiring additional employees) and these costs are passed on to the consumer in the from of price increases. The power crisis in California during 2000 and 2001 is such an example.