Draw and label the graphs to indicate the effect of a decrease in price of fish and chips on both demand curves
I am totally uncertain what you have a question on.
We don't have your graphs and I have no idea what UNISA is.
To draw and label the graphs to indicate the effect of a decrease in price of fish and chips on both demand curves, we will need to understand the basic concepts of demand and supply and how they interact.
First, let's talk about demand. Demand represents the quantity of a good or service that consumers are willing and able to purchase at a given price during a specific period. The demand curve illustrates the relationship between the price of a product and the quantity demanded.
Secondly, let's consider supply. Supply represents the quantity of a good or service that producers are willing and able to provide at a given price during a specific period. Similarly, the supply curve shows the relationship between the price of a product and the quantity supplied.
Now, let's discuss the effect of a decrease in price of fish and chips on both demand curves:
1. Demand curve:
When the price of fish and chips decreases, we expect the quantity demanded to increase, ceteris paribus (assuming all other factors remain constant). This means that at each price level, consumers will be willing to purchase more fish and chips.
To illustrate this on the demand curve, we depict a rightward shift of the curve. This shift indicates an increase in quantity demanded at each price point. Label this curve as D1.
2. Supply curve:
The effect of a decrease in price on the supply curve depends on various factors, including production costs, technology, and availability of raw materials. For simplicity, let's assume that these factors remain constant.
Generally, a decrease in price might lead to a decrease in the quantity supplied as producers might find it less profitable to produce and sell fish and chips at a lower price. However, it's also possible that some producers may try to increase their market share by expanding production in response to lower prices.
To represent the potential effect on the supply curve, we can depict a leftward shift, indicating a decrease in quantity supplied at each price level. Label this curve as S1.
Now, let's draw the graphs:
Price
^
|
D1 | D
|
-----------
|
S1
|
|
------------------------> Quantity
Label the horizontal axis as "Quantity" and the vertical axis as "Price."
The initial demand curve is labeled as D, showing the original relationship between price and quantity demanded. The initial supply curve is labeled as S, representing the original relationship between price and quantity supplied.
After the decrease in price, the demand curve shifts to the right, indicating an increase in quantity demanded at each price level and is labeled as D1. The supply curve shifts to the left, indicating a decrease in quantity supplied at each price level and is labeled as S1.
On the graph, you can label the initial equilibrium point as E, where the demand and supply curves intersect. You can also indicate the new equilibrium point as E1, where the new demand and supply curves intersect.
By drawing and labeling these graphs, you can visually represent the effect of a decrease in price on both demand and supply curves for fish and chips.