AQA Economics Supply and Demand Revision Notes
Master AQA Economics Supply and Demand using simple revision notes, key facts and practice questions — all generated by AI for your exam.
Supply and demand are fundamental concepts in economics that describe how the quantity of a good or service available in the market interacts with consumer desire for that good or service. The relationship between supply and demand determines market prices and quantities sold.
Key Concepts
- 1Demand refers to the quantity of a good or service that consumers are willing and able to purchase at various prices.
- 2Supply refers to the quantity of a good or service 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 when the quantity demanded equals the quantity supplied, resulting in a stable market price.
Simple Explanation
Supply and demand are like a dance between buyers and sellers in the market. When people want to buy more of something (demand), prices can go up. Conversely, when sellers are willing to provide more of something (supply), prices can go down. The point where the amount people want to buy matches what sellers want to sell is called equilibrium.
Memory Trick
“Think of 'D' for Demand as 'Desire' and 'S' for Supply as 'Sell'. Together they create the 'Dancing Market' where prices move up and down based on how much people want to buy or sell.”
Flashcards
What is demand?
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Exam Questions
Describe and explain the factors that can shift the demand curve. [6 marks]
6 marksView mark scheme hint▾
Consider factors like income, consumer preferences, prices of substitutes and complements, and population changes.
Explain how a change in consumer income affects demand. [4 marks]
4 marksView mark scheme hint▾
Discuss normal and inferior goods and how demand shifts in response to income changes.
What is meant by equilibrium price? [2 marks]
2 marksView mark scheme hint▾
Define equilibrium price and explain its significance in a market.
Practice Quiz
What happens to demand when prices decrease?
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