This line graph has the title ‘Figure 1: Market for PlayStation controllers’:
- The point where the x-axis and y-axis meet (the origin) is labelled 0.
- The x-axis is labelled Quantity, and it extends from the origin towards the right. Three values are labelled along the x-axis beginning about halfway along the axis, from left to right: QS/Q1, Q2 and QD.
- Its y-axis is labelled Price, and it extends from the origin upwards. Two values are labelled along the y-axis about halfway up the axis, from bottom to top: P1 and P2.
The line graph has three curves plotted on it:
- the demand curve D1, which runs from the top left of the graph to near the bottom right of the graph
- the demand curve D2, which runs horizontal to D1 but is shifted to the right and higher
- the supply curve S1, which runs from the bottom left of the graph to the top right of the graph.
The line graph has five broken lines plotted on it, each of which extends from a value on the x-axis or y-axis.
The three curves and the five values marked by broken lines are explained with the following annotations, which are linked to specific areas or points on the graph using pointers or arrows:
- The decrease in the price of consoles increases the demand for controllers (this annotation is linked to the shift in the demand curve to the right, from D1 to D2).
- A temporary shortage of controllers occurs, placing upward pressure on price (linked to the distance between QD and QS/Q1).
- QD contracts (linked to upward movement along the new demand curve, D2) and QS expands to ‘clear’ the shortage of controllers (linked to upward movement along S1).
- Results in a higher price … (linked to a rise in equilibrium price from P1 to P2)
- … and a higher quantity traded (linked to an increase in quantity traded from Q1 and Q2).