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.

s=d

 

Supply Shifts to the left

fall-supply-oil-price

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.

A Fall in Demand

fall-in-demand

Fall in demand increase supply

Fall in Supply

fall-supply-oil-price

Fall in supply causing lower quantity and higher price.

rise-in-demand

Increase Demand Fall in Supply

supply-demand

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

Increase in supply – inelastic demandinelastic-demand-volatile-prices

Market equilibrium

market-equilibrium excess-supply-move-to-eq excess-demand-move-to-eq-id

fall-in-price-id-inelastic-demand

Fall in price from increase in supply and fall in demand

Fall in supply leading to higher price of oilincrease-demand-id

Rise in demandlong-term-supply-increases

Increase in demand causes supply to increase in long term.increase-supply-inelastic-demand

Increase in supply with inelastic demand.

Price set below the equilibrium (football)

price-below-equilibrium

Inelastic supply and bigger increase in demand

demand-increase-greater-supply

UK Housing market has often seen demand increase at a faster rate than supply, causing price to rise.

supply-increase-more-than-demand2

Supply increase same as demand.supply-increase-demand-same

Elasticity

The effect of a subsidy depends on elasticity of demand

Subsidy-elasticityThe effect of a tax depends on elasticity of demand

tax-depends-elasticity

 

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7 thoughts on “Diagrams for Supply and Demand

  1. 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

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