AQA Economics Supply and Demand Revision Notes

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

Supply and demand are like two sides of a seesaw. When people want to buy more of something (demand), sellers will want to sell more of it (supply), especially if the price is right. If the price goes up, sellers will want to sell even more, but buyers might want less. The point where the amount people want to buy matches the amount sellers want to sell is called market equilibrium.