Diagrams for Supply and Demand

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 I can easily find a suitable diagram to illustrate what is happening.

supply-demand

Supply Shifts to the Right

Supply -right

In this diagram the supply curve shifts to the right. It leads to a lower price and increase in quantity. The supply curve may shift to the right because of:

  • Lower costs of production
  • Lower taxes
  • Increased productivity

Supply and Demand Shift Right

supply-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

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-demand

An increase in demand leads to higher price and higher quantity.

A Fall in Demand

Fall-in-demand

Fall in demand increase supply

supply-demand

Fall in Price

 

Fall in Supply

supply-demand

Fall in supply causing lower quantity and higher price.

 

Increase Demand Fall in Supply

supply-demand

Increase in demand and fall in supply leading to higher price.

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3 Responses to Diagrams for Supply and Demand

  1. victoria gurajena September 6, 2009 at 9:12 pm #

    i am a student doing economics AS and i have found your webside very interesting i would like you to find out what diagrams can be used to show market change

  2. Robbie A October 7, 2011 at 11:12 am #

    very helpful stuff for an as economics student :)

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