Friday, July 27, 2018

Do We See Demand And Supply Curve In The 4th Quadrant?

Demand Curve depicts law of Demand and the Supply Curve depicts law of Supply.
Demand Curve represents inverse relationship between price and quantity of goods purchased by a buyer at a particular time. 
Supply Curve on the other hand, represents the amount of goods that a seller is willing to sell at a particular price during a particular period of time. Supply Curve shows direct relationship between price and quantity. SINCE, THE PRICE OF A COMMODITY CAN NEVER BE NEGATIVE so, the supply curve and the demand curve can NEVER be seen in the 4th QUADRANT
But there can be shifts in demand curve as well as supply curve.
A rightward shift indicates positive or increase in Demand Curve, which is because price remains same and quantity demanded increases, and vice-versa for decrease or leftward shift in Demand Curve.
On the other hand, leftward shift in Supply Curve is observed when price of the commodity rises and quantity produced decreases.

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