TikZ diagrams for economists: A price ceiling

I have been dabbling with the TikZ package to create some diagrams relevant to a first year microeconomics course. The following diagram of a price ceiling may be useful to others wishing to integrate similar diagrams into their LaTeX documents or Beamer presentations. To use, insert the following code anywhere you like within a .tex document (you must include \usepackage{tikz} in your header):

This diagram was created with the TikZ package in LaTeX.

INSERT INTO .TEX DOCUMENT

[sourcecode]
\begin{tikzpicture}[domain=0:5,scale=1,thick]
\usetikzlibrary{calc} %allows coordinate calculations.

%Define linear parameters for supply and demand
\def\dint{4.5} %Y-intercept for DEMAND.
\def\dslp{-0.5} %Slope for DEMAND.
\def\sint{1.2} %Y-intercept for SUPPLY.
\def\sslp{0.8} %Slope for SUPPLY.

\def\pfc{2.5} %Price floor or ceiling

\def\demand{\x,{\dslp*\x+\dint}}
\def\supply{\x,{\sslp*\x+\sint}}

% Define coordinates.
\coordinate (ints) at ({(\sint-\dint)/(\dslp-\sslp)},{(\sint-\dint)/(\dslp-\sslp)*\sslp+\sint});
\coordinate (ep) at (0,{(\sint-\dint)/(\dslp-\sslp)*\sslp+\sint});
\coordinate (eq) at ({(\sint-\dint)/(\dslp-\sslp)},0);
\coordinate (dint) at (0,{\dint});
\coordinate (sint) at (0,{\sint});
\coordinate (pfq) at ({(\pfc-\dint)/(\dslp)},0);
\coordinate (pfp) at ({(\pfc-\dint)/(\dslp)},{\pfc});
\coordinate (sfq) at ({(\pfc-\sint)/(\sslp)},0);
\coordinate (sfp) at ({(\pfc-\sint)/(\sslp)},{\pfc});

% DEMAND
\draw[thick,color=blue] plot (\demand) node[right] {$P(q) = -\frac{1}{2}q+\frac{9}{2}$};

% SUPPLY
\draw[thick,color=purple] plot (\supply) node[right] {Supply};

% Draw axes, and dotted equilibrium lines.
\draw[->] (0,0) — (6.2,0) node[right] {$Q$};
\draw[->] (0,0) — (0,6.2) node[above] {$P$};

%Price floor and ceiling lines
\draw[dashed,color=black] plot (\x,{\pfc}) node[right] {$P_c$};
\draw[dashed] (pfp) — (pfq) node[below] {$Q_d$};
\draw[dashed] (sfp) — (sfq) node[below] {$Q_s$};

\draw[->,baseline=5] ($(0,{\pfc})+(-1.5,0.7)$) node[label= left:Price Ceiling] {} — ($(0,{\pfc})+(-.1,0.1)$);

\end{tikzpicture}
[/sourcecode]

Advertisements

Leave a Reply