Supply and Demand Chart
The Supply and Demand Chart is a reference tool covering supply and demand chart, supply and demand graph, supply and demand curve, supply and demand diagram. Use the chart below to look up values instantly. Printable and downloadable versions are available on this page.
What Is a Supply and Demand Chart?
- A supply and demand chart (also called a supply and demand curve diagram) is the foundational diagram of microeconomics. It shows the relationship between price and quantity for a good or service — with the demand curve showing how much buyers will purchase at each price, and the supply curve showing how much sellers will produce at each price.
- The demand curve slopes downward from left to right — as price falls, buyers demand more quantity. The supply curve slopes upward from left to right — as price rises, producers supply more quantity.
- The equilibrium point is where the two curves cross — the price at which the quantity demanded exactly equals the quantity supplied. This is the market-clearing price.
- When supply or demand shifts (due to new factors like changing consumer preferences, input costs, or technology), the equilibrium moves to a new price and quantity combination. The interactive diagram above demonstrates all four shift scenarios.
Supply and Demand Shift Reference Chart
| Shift Type | Curve That Shifts | Causes (Examples) | Effect on Equilibrium Price and Quantity |
|---|---|---|---|
| Demand Increase | Demand curve shifts RIGHT | Rising incomes, population growth, consumer preference change toward the good, change in price of complement goods | Price rises. Quantity rises. |
| Demand Decrease | Demand curve shifts LEFT | Falling incomes, consumer preference change away, substitute goods become cheaper, population decline | Price falls. Quantity falls. |
| Supply Increase | Supply curve shifts RIGHT | Lower production costs, new technology, more producers enter the market, favourable weather (for agricultural goods) | Price falls. Quantity rises. |
| Supply Decrease | Supply curve shifts LEFT | Higher input costs, fewer producers, supply chain disruption, unfavourable weather, regulations | Price rises. Quantity falls. |
| Both D & S Increase | Both shift RIGHT | Economic boom — more buyers and lower production costs simultaneously | Quantity rises. Price change ambiguous. |
| Both D & S Decrease | Both shift LEFT | Recession — fewer buyers and higher costs | Quantity falls. Price change ambiguous. |
| D Increases, S Decreases | Demand RIGHT, Supply LEFT | Consumer boom plus supply disruption | Price rises sharply. Quantity change ambiguous. |
| D Decreases, S Increases | Demand LEFT, Supply RIGHT | Recession plus new technology or overproduction | Price falls sharply. Quantity change ambiguous. |
Source: Standard introductory microeconomics — Mankiw Principles of Economics
Price Elasticity Reference
| Elasticity Classification | Price Elasticity Value | What It Means and Example |
|---|---|---|
| Perfectly Inelastic | 0 | Quantity demanded does not change regardless of price. Example: life-saving medication with no substitute. |
| Inelastic | 0 to 1 | Quantity changes less than price. Example: petrol (gasoline) — people still need to drive even when prices rise. |
| Unit Elastic | Exactly 1 | Quantity and price change by the same percentage. |
| Elastic | Greater than 1 | Quantity changes more than price. Example: luxury goods, restaurant meals — consumers easily reduce consumption. |
| Perfectly Elastic | Infinity | Even a tiny price increase causes demand to drop to zero. Example: a perfectly competitive commodity market. |
Source: Standard microeconomics price elasticity definitions — Khan Academy Microeconomics
Supply & Demand Simulator
Adjust the supply, demand, and market price sliders to watch equilibrium price and quantity shift in real time, with surplus and shortage zones shown visually.
Frequently Asked Questions
What is the law of demand?
The law of demand states that as the price of a good increases, the quantity demanded decreases, all else equal. This inverse relationship between price and quantity demanded is why the demand curve slopes downward.
What is the law of supply?
The law of supply states that as the price of a good increases, the quantity supplied increases, all else equal. Producers are willing to supply more at higher prices because higher prices make production more profitable.
What is equilibrium in supply and demand?
Equilibrium is the price at which the quantity that buyers want to purchase exactly equals the quantity that sellers want to supply. At this price the market clears — there is no surplus (excess supply) and no shortage (excess demand).
What causes the demand curve to shift?
The demand curve shifts when factors other than the product's own price change — including consumer income, preferences, the price of related goods (complements and substitutes), population size, and consumer expectations about future prices. A rightward shift means demand has increased at every price level.
What is a surplus in supply and demand?
A surplus occurs when the market price is above equilibrium — suppliers want to sell more than buyers want to buy at that price. Market forces push the price down toward equilibrium as suppliers lower prices to sell excess inventory.
What is a shortage in supply and demand?
A shortage occurs when the market price is below equilibrium — buyers want to purchase more than suppliers are willing to sell at that price. Market forces push the price up as buyers compete for the limited supply.
What happens to price when both supply and demand increase?
When both supply and demand increase simultaneously, quantity definitively rises. The effect on price is ambiguous — price rises if demand increases more than supply, falls if supply increases more, and stays approximately the same if both shift by equal amounts.
What is price elasticity of demand?
Price elasticity of demand measures how responsive the quantity demanded is to a change in price — calculated as the percentage change in quantity demanded divided by the percentage change in price. A value above 1 means demand is elastic (very responsive to price changes), below 1 means inelastic (less responsive).