Page 322 - Analysis, Synthesis and Design of Chemical Processes, Third Edition
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The demand curve (on the left) slopes downward and shows the general trend that as the price for
commodity X decreases, the demand increases. With very few exceptions, this is always true. Examples
of chemical products following this trend are numerous; for example, as the price of gasoline,
polyethylene, or fertilizer drops, the demand for these goods increases (all other factors remaining
constant). The supply curve (shown on the right) slopes upward and shows the trend that as the price
rises, the amount of product X that manufacturers are willing to produce increases. The slope of the
supply curve is often positive but may also be negative depending on the product. For most chemical
products, it can be assumed that the slope is positive, and with all other factors remaining constant, the
quantity supplied increases as the price for the product increases. Unlike physical laws that govern
thermodynamics, heat transfer, and so on, these trends are not absolute. Instead, these trends reflect human
nature relating to buying and selling of goods.
When market forces are in equilibrium, the supply and demand for a given product are balanced, and the
equilibrium price (P ) is determined by the intersection of the supply and demand curves, as shown in
eq
Figure 10.8.
Figure 10.8 Illustration of Market Equilibrium for Product X