Supply and Demand

Overview

Supply and Demand curves are used to in economics to show what the equilibrium supply and price of any particular good or service. The curves can be used to show the effects of changes to the equilibrium levels.

The curves are typically drawn such that the price is on the y axis and quantity of product is on the x-axis.

• Demand Curve - is generally thought to be downward sloping for most products, although there are exceptions
• Supply Curve - the supply curve is upward sloping in the classical model using the classical assumptions. Like the demand curve, this doesnt always hold.

Time Frames

When constructing a curve, it is understood that the curve represents a quantity supplied or demanded over a pre-defined time frame. (example, a week or a month) Long Run vs Short Run

Supply and Demand Curves

A sample set of supply and demand curves. The sliders move each curve showing the impact on the equilibrium point. copy