Microeconomics Project - a Demand Curve of Oil Company

                          MICROECONOMICS

                                                    PROJECT

                                                                                              Economics 102

                                                                                              Chiao-Han Lin

                                                                                              Maisha Tarannum & Najmul Alam

                                                                                              May 22, 2018

     In economics, goods are those items which can satisfy human wants. For example- a customer buys a product in order to fulfill his satisfaction. There are two types of goods; one is the tangible property, other one is non-physical or service. I would like to choose Oil good.

         A market is a place where a group of buyer and seller of a particular goods and service. A function that shows the quantity demanded at different prices is known as demand curve. Moreover, the quantity that the buyers are willing and able to buy at a particular price is known as how much quantity is demanded. The law of demand states that other factors being constant, price and quantity demand of any good and service are inversely related to each other. When the price of a product increases, the demand for the same product will fall. In law of demand, a demand curve is negatively sloped. The lower the price, the greater the quantity demanded. Demand summarizes how consumers choose to use a good, given their preferences and the possibilities for substitution. For example, when the price of oil is high, consumers will use it only in its most valuable uses. They will not misuse it. Moreover, when the price will fall, consumers will also use oil in its less valued uses. For example- heating, and rubber duckies. Eventually, consumers will buy more oil at lower prices than at higher prices.

         A demand curve is a graph that shows how the demand for a commodity or service varies with changes in its price. It is mainly the relationship between the price of certain commodity and the amount that consumers are willing or able to purchase at given price.

[pic 1]

Figure 1: A Demand curve of Oil Company

      In this diagram, we can see the quantities demanded at different prices for Oil Company. When PB is $5, the quantity demanded QB is 50 and when PA is $20, the quantity demanded is 25.