The amount that price changes depends on the elasticity of the demand curve. In this diagram two different demand curves are shown and the price responds to a fall in supply.

The importance of the price elasticity can be demonstrated in the diagram. Two demand curves have been drawn. One, typical of many primary commodities is relatively price inelastic, D1, and one for comparison relatively price elastic D2. Let us assume that the market is in equilibrium at price P2. If there is now a supply shock and supply decreases causing the supply curve to makes a shift to the left the equilibrium market price will increase. When demand is relatively price inelastic the price will increase from P2 to P1 and when the demand is relatively price elastic the price will increase from P2 to P0.