.
Aruna Mahat
Introduction
Demand
Cont.
Figure of demand
Figure of Supply
Demand*
100
Qd=Qs
Quantity of Chicken
Demand*
100
Qd=Qs
Quantity of Chicken
+50%
Price
of
Chicken
Rs.300
+50%
Rs.200
+50%
Rs.150
Demand*
50
75
100
Qd=Qs
150
Quantity of Chicken
225
Demand 1
RS 300
Price
of
Chicken
Rs.200
Rs150
Demand*
50
75
100
Qd=Qs
150
Quantity of Chicken
225
Demand 1
Rs300
Rs 200
Rs150
Demand*
50
75
100
Qd=Qs
150
Quantity of Chicken
225
Demand 1
Rs 300
At a price of Rs200 the Quantity
Demanded is going to be 150 BUT at
a price of Rs200 there is still going to
be a Quantity Supplied of 100. OUR
MARKET IS IN DISEQUILIBRIUM!!
Rs 200
Rs150
Demand*
50
75
100
Qd=Qs
150
Quantity of Chicken
225
Demand 1
Rs300
Rs 200
Rs 150
Demand*
50
75
100
Qd=Qs
Qs-100
150
Qd=150
Quantity of Chicken
Demand 1
225
Notice: Quantity Demanded
Is greater than Quantity Supplied
At this price
Rs300
We have a SHORTAGE in the
Market!
How do we eliminate this
SHORTAGE?
Rs.200
Shortage
Rs150
Demand*
50
75
100
Qd=Qs
Qs-100
150
Qd=150
Quantity of Chicken
Demand 1
225
Notice: Quantity Demanded
Is greater than Quantity Supplied
At this price
Rs.300
Rs.200
Rs.150
Demand*
50
75
100
Qd=Qs
Qs-100
150
Qd=150
Quantity of Chicken
Demand 1
225
Notice: Quantity Demanded
Is greater than Quantity Supplied
At this price
Rs.300
Rs.200
Rs.150
Demand*
50
75
100
Qd=Qs
Qs-100
150
Qd=150
Quantity of Chicken
225
Demand 1
Conclusion
In conclusion there is inverse relationship between
price and demand of the chicken. But with supply there
is positive relationship. When the shortage of the
product in the market, it doesnt only increases the
demand of those product but also increases the price
of the products in order to maintain the market
mechanism.