Demand & Supply Essay Example | Topics and Well Written Essays - 500 words

Demand & Supply - Essay ExampleLaw of supply, on the other hand, proposes that firms would supply more of a good at a high price than they would at a lower price. Again all other factors, notably scarcity of the good, are held constant. This results in an upward sloping supply curve. The commercialize equilibrium is attained at a point where the demand and supply curves intersect giving us the equilibrium price. In this analysis the impact of an increase in consumer income is shown by a shift in demand curve outside. On this demand curve the consumer demands more of the good at the same price. besides a specific choice pattern of consumer would result in a differing demand curve. For instance take the example of a consumer who is collector of paintings from a feature historic period. This consumer can pay any price for a desired painting up to a certain point and his demand curve may be shaped accordingly. Whereas the supplier would continue to be governed by the basic law of s upply.