A-Level Economics Supply and Demand Revision Notes

• 1Demand is the quantity of a good that consumers are willing and able to purchase at various prices.
• 2Supply is the quantity of a good that producers are willing and able to sell at various prices.
• 3The law of demand states that, all else being equal, as the price of a good decreases, the quantity demanded increases.
• 4The law of supply states that, all else being equal, as the price of a good increases, the quantity supplied increases.
• 5Market equilibrium occurs where the quantity demanded equals the quantity supplied, determining the market price.

Supply and demand are like a dance between buyers and sellers. When people want to buy more of something, the price usually goes up, which encourages sellers to make more of it. Conversely, if there’s too much of something and not enough buyers, the price goes down, and sellers might make less. This balance helps decide how much of a product is available and at what price.