r forget that
there is no service or commodity produced by man, however essential it
may seem, the demand for or the supply of which might not be reduced
to nothing, if the price were sufficiently raised on the one hand, or
lowered on the other. How easy it is sometimes to forget this simple
truth may be seen from the mistake so commonly made of supposing,
because the peoples of Central Europe were left, on the cessation of
the war, starving and destitute of the means of life and the materials
of work, that they must necessarily become heavy purchasers of
imported goods; without pausing to consider whether the prices were
such as they could afford to pay.

Sec.2. _Diagrams and their Uses_. It will help to prevent mistakes like
this and more generally to make sharp and clear the fundamental
relations which exist between demand, supply and price, if we exhibit
them pictorially in the form of a diagram. Such diagrams are of great
service in many parts of economic theory, not because they can prove
anything which could not be proved otherwise, but because, being
really a simpler medium of expression than words, they enable the mind
to grasp more readily and to retain more vividly the essential facts
of complex relations.

Figure 1:

Y
|
| S'
| *
D | **
|* **
| ** *
| ** *
| * *
| ** **
| ** *
| ** *
| ** **
| ** *
| ** Q **
_l_|--------------*------------* R
| |*** **
| | ** P **
_m_|--------------------***
| | *** |***
_k_|--------------***----+---** _r_
| _q_*| | ***
| *** | | ****
| *** | | ****
| *** | | ***
S |**** | | ****
| | | ** D'
| | |
| | |