LAWS OF SUPPLY AND DEMAND 



limit which is the reserved price, and which may be absolutely 

 nil. Then the supply at each price is equal at all prices to the 

 whole supply, and it is the competition among buyers alone which 



Qrs 



1SOO 



lf.00 



1400 



1200 



1000 



800 



600 



400 



200 



Fi 3 .7. 



1'. mpplif. 



10 



M 



PO 



Shillings. 



FIG. 7. Showing effect of selling 800 quarters unreservedly by auction, the 

 Demand Curve being constant, as in Fig. 1. 



The supply curve becomes a straight horizontal line. 



The market price will be 50*. 



If 1,200 quarters were to be sold unreservedly, the market price would be 30*. 



If only 200 quarters, the market price would be 61*. 



keeps the price above zero. This state of things is shown in 

 Fig. 7, where the supply curve has become a straight line paral- 

 lel to the base line. Fig. 8 represents the supply and demand 

 curves at an auction, with a reserved price at 25s. 



Qrs. 

 1300 



1300 

 1400 

 1200 

 1000 

 800 

 COO 

 400 

 00 



Fij.8. 



t upp?y. 



20 



CO 



80 



FIG. 8. Shows the effect of a sale by auction, with a reserved price of 45*. 



If 1,200 quarters are offered for sale, only 900 will be sold, and the price will be the 



minimum of 45*. 

 If 600 quarters are offered for sale, they will all be sold, and the price be 55*. 



O 2 



