Can anyone explain how to read that first graph? Like, there's a line for demand, say, but given the axes labels, it seems to say "for greater demand, the price goes down", so the exact opposite of what basic price theory predicts.
Same for the supply lines, just the other way around.
Also, the use of straight lines indicates a linear relationship. Is that really the case in practice?
> "for greater demand, the price goes down"
If demand were to be greater, the entire demand line shifts to the right. But demand is generally stable because oil is a neccessity in the short term. This demand line is near vertical which means people/companies will buy a little less when the price spikes, but not drasticly less. People still need to drive to work, heat homes, etc.
kleiba2 · · focus · HN ↗
Same for the supply lines, just the other way around.
Also, the use of straight lines indicates a linear relationship. Is that really the case in practice?
francisofascii · · focus · HN ↗
If demand were to be greater, the entire demand line shifts to the right. But demand is generally stable because oil is a neccessity in the short term. This demand line is near vertical which means people/companies will buy a little less when the price spikes, but not drasticly less. People still need to drive to work, heat homes, etc.