Running head: “GOOD X” DEMAND AND SUPPLY CURVE 1

Good X demand and supply curve

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Institution

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The graph I in the paper is generated using Microsoft excel with trimmed values. The

values are based on demand and supply process within a sector.

The diagram shows a demand supply graph for the “good x.” Initially the company the

goods supply and demand curve occur at point E2 where DD and SS meets, where SS represents

the supply curve and DD represents the demand curve. The corresponding quantity value is Q1.

The demand has shifted towards left because the people income has reduced. The resulting low-

income resulting demand decline discourages the company from producing more products since

the input cost will be greater as compared to the product income. The company has to reduce the

units of production and supply to the market resulting into supply S’. The demand curve D’D’

and supply curve S’S’ produces a new equilibrium point E2 which produces Q2. The quantity Q1

is slightly less than Q1 of “Good x.” The influence of shift in the case is ambiguous since the

products maintains the same prices due to available policies. The shift of quantum from right to

left shows how the income can affect the businesses operation.

From the curve, the shift of demand from DD to D’D’ is a proportionate to the supply SS

to S’S’. The shift is proportionalities leads to the establishment of equilibrium price P1 though the

Equilibrium of the prices increases.

The situation could be encountered in many situations for the case, in oil and gas similar

scenarios occurs during the supply of the products. In some cases, the customers income drops

which results in a drop on the demand. Since the filling station feeds people and is regulated by

the government Heakal, R. (2015). The product demand could lead to a filling station supplying

less fuel to the station. Due to the available regulations the prices remain constant which

produces a similar curve. The process leads to proportional shift demand and supply curves.
“GOOD X” DEMAND AND SUPPLY CURVE 3

Another cases, is when people are using public rail transport. The rail transportation

tickets have fixed prices. In some case, some individuals might lack fare to pay for the tickets. In

the process the train scheduled for a certain route will move regardless of the available

passengers (Clements, 2017). The demand on the train station drops as well as the supply but the

prices are maintained at the equilibrium.

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Reference

Heakal, R. (2015). Economics basics: Supply and demand. Investopedia. accessed

September, 28.

Clements, K. W. (2017). The trade balance in monetary general equilibrium. Routledge.

“GOOD X” DEMAND AND SUPPLY CURVE 5

Graph

P1

D’

Graph I

Reference table

Prices in US Quantity D' S D S'

dollars
10 10 90 25 105 10
20 20 80 35 95 20
30 30 70 45 85 30
40 40 60 55 75 40
40 50 50 65 65 50
50 60 40 75 55 60
60 70 30 85 45 70
70 80 20 95 35 80
80 90 10 105 25 90
“GOOD X” DEMAND AND SUPPLY CURVE 6