Section outline

  • Learning Intentions

    • To explore how supply and demand affect prices in a market
    Success Criteria
    • Able to describe what causes changes in quantity supplied and demanded (and in supply & demand).
    • Able to describe consequent changes in price, surpluses and deficits.
    Watch this video clip on Supply and Demand curves.


    Supply curve
    A supply curve plots price of a product against the quantity supplied (by producers).
    It slopes from bottom left to top right, because the higher the price, the more producers want to make and sell it.

    We assume that only one 'variable' changes at a time.
    If price of the product increases, we move to a new point along the curve - called an increase in quantity supplied. 

    If price stays fixed, but one other 'variable' changes (eg productivity, cost of raw materials), then the curve itself shifts to the right (increase in Supply) or to the left (decrease in Supply).   

    Demand curve
    A demand curve plots price of a product against the quantity demanded (by consumers).
    It slopes from top left to bottom right, because the higher the price, the fewer consumers want to buy it.

    We assume that only one 'variable' changes at a time.
    If price of the product increases, we move to a new point along the curve - called a decrease in quantity demanded. 

    If price stays fixed, but one other 'variable' changes (eg incomes, prices of other related products), then the curve itself shifts to the right (increase in Demand) or to the left (decrease in Demand).   


    Activity
    Complete the Google Doc in Google Classroom called Supply / Demand Activities.