In this market, due to limited time period, we can neither increase the sale or decrease the sale. It means that supply is completely fixed. Only demand may change. Perishable commodities are included in this type of market. For example, milk, curd, butter, fruits, vegetables, eggs, etc.
In the given figure, on X axis, we have taken units of quantity, and on Y axis, price of the commodity. Since supply is fixed, therefore, supply curve SQ is a vertical line parallel to Y axis. Demand and supply is equal at point E, and price of commodity is determined at OP. Due to increase in demand, demand shifts upwards and new demand curve is D1D1. The new equilibrium point is at and new price is OP1. On the contrary, due to decrease in demand, the demand curve shifts downwards and new demand curve is D2D2. The new and supply is at E2. The price decreases and new price is OP2. Therefore, in very short period market, since supply is fixed, demand alone determines the price.
