IN GEOMETRIC TERMS

their bearings better if the exact relation is shown be-tween these and the “map” here used. Therefore, it seemsworth while here to bridge the gap between these twosorts of representations just as, at the outset, the gapwas bridged between the map and pictures of the in-come stream earlier in this book. We may readily andcompletely derive the curves of demand and supply fromthe map and the constructions which have been drawnon it.

The individual demand curve of Individual 1 is foundas follows: Rotate the straight line PQ about P as a pivot,that is, draw a series of PQ ’s from P at varying slopes. Oneach such PQ find Q, the point of tangency with a W line.The horizontal displacement of Q to the right of P is theloan which Individual 1 is willing to take at the rate ofinterest represented by the slope of PQ.

Thus we have both coordinates (namely, interest rateand amount of loans demanded at that rate) given by themap. Having these coordinates, we merely need to plotthem on a separate sheet in the usual way.

In the same way we may construct every other in-dividual’s demand curve. The aggregate curve of all in-dividuals (by adding all demands at a given interestrate) gives the total demand curve in the market.

The supply curves are constructed similarly; the onlydifference being that for supply we use the horizontaldisplacement of Q to the left of P, instead of to the right.

Of course, at any given slope near the slope of themarket rate, some individuals will have a right, and othersa left, displacement, and at the market rate itself the twodisplacements are equal in the aggregate. This is truewhere the supply and demand curves intersect.

Evidently the map gives us the same relationships as

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