LA WS OF SUPPL Y AND DEMAND 



77 



quarters, etc. Supply at a price denotes the quantity which at a 

 given price holders would be, then and there, willing to sell. 

 Supply at a price is also mensurable. Demand at a price denotes 

 the quantity which, then and there, buyers would purchase at 

 that price. 



The supply at a price and the demand at a price in any 

 given market will probably vary with the price ; they may be 

 said to be functions of the price. 



Let a curve be drawn, the abscissae of which represent prices, 

 and the ordinates the supplies at each price. This curve will be 

 called the supply curve. A similar curve, constructed with the 

 demand at each price as ordinates, will be called the demand curve. 



10 20 SO 40 50 60 70 80 Shilling* 



FIG. 1. First Law of Supply and Demand. 



\Thole supply for sale at any price, 1,400 quarters of wheat. 



Price at which whole supply would be sold, 90*. 



Price at which whole supply would be bought, 20*. 



Market price, 50*. 



Price below which no sale could take p'ace, 40*. 



Price above which no sale could take place, 62*. 



Quantity which will be sold, 800 quarters. 



Fig. 1 shows a pair of imaginary demand and supply curves 

 for corn. At 60s. per quarter the supply is 1,000 quarters ; at 

 55s. the supply is 900 quarters ; at 50s. only 800 quarters ; at 

 45s. only 600 quarters ; at 40s. the supply is n il. 



At 62s. the demand is nil ; at 55s. only 600 quarters ; at 

 50s. it is 800 quarters; at 45s. 900 quarters; at 40s. 1.000 

 quarters ; and continues to rise fast at lower prices. 



The first law of demand and supply may now be stated as 

 follows : 



