Any Economists out there!!!!!

savvysass

Hi

In my first year of a management degree and loving it so far, the only subject I am finding really difficult to get my head around is bloody economics or more to the point supply and flipping demand curves!!!!!!

Just got some questions to complete for next week and I am confusing myself with them, I have to draw a diagram and put a brief explanation on how an increase in the demand for oil from china led to market price rise.

so, will that lead to a shift along the demand curve or a shift to the right of the demand curve?

Now if someone could explain in plain english to me I would be very grateful!!!

TeaKandy

Increased demand is represented on the graph as the curve being shifted right, because at each price point, a greater quantity is demanded, possibly because changing of taste or market size. In other word, when there is a change in an influencing factor other than price, there may be a shift in the demand curve to the left or to the right

so at the new equilibrium, the price will go up, if you supply is the regular one (slope upward), the equilibrium quantity will also increase but if you supply is vertical (because oil is fixed supply) then only the price goes up but quantity still the same. HTH

si1503

A change in demand will be illustrated by a shift in the demand curve. Increase = rightward shift. Decrease = leftward.

As a result of a rightward shift, if done correctly equilibrium will meet at a higher price level than previously.