inc or Dec of supply with table
Answers
Answer:
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Answer:
This is a collection of diagrams for supply and demand. It is mainly for my benefit, so when creating a post, like the price of tea (or when I’m teaching online) I can easily find a suitable diagram to illustrate what is happening.
s=d
Demand curve
movement-along-demand
A contraction on the demand curve is due to higher price leading to lower demand
An extension on the demand curve is due to lower price leading to higher demand.
The supply curve
movement-along-demand
A higher price causes an extension along the supply curve (more is supplied)
A lower price causes a contraction along the supply curve (less is supplied)
Supply Shifts to the left
fall-supply-oil-price-ar
In this diagram the supply curve shifts to the left. It leads to a higher price and fall in quantity demand. The supply curve may shift to the left because of:
Higher costs of production
Higher taxes
Fall in productivity
Supply and Demand Shift Right
In this diagram, supply and demand have shifted to the right. This has led an increase in quantity (Q1 to Q2) but price has stayed the same.
It is possible, that if there is an increase in demand (D1 to D2) this encourages firms to produce more and so supply increases as well.
Diagram showing Increase in Price
rise-in-price
In this diagram, we have rising demand (D1 to D2) but also a fall in supply. The effect is to cause a large rise in price.
For example, if we run out of oil, supply will fall. However, economic growth means demand continues to rise.
Increase in Demand
increase-in-demand
An increase in demand leads to higher price and higher quantity.
Increase in demand with inelastic supply
inelastic-supply-rise-in-demand
A Fall in Demand
fall-in-demand
Fall in demand increase supply
rise-in-supply-fall-demand-arrows
Fall in Supply
fall-supply-oil-price-ar
Fall in supply causing lower quantity and higher price.
Increase in supply – inelastic demand
inelastic-demand-volatile-prices
An increase in supply when demand is inelastic only causes a small rise in demand.