GCSE Economics Supply and Demand Revision Notes
Master GCSE 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 explain how prices are determined in a market. Supply refers to how much of a good or service producers are willing to sell at different prices, while demand refers to how much consumers are willing to buy. The interaction between supply and demand sets the market equilibrium price.
Key Concepts
- 1Supply is the quantity of a good or service that producers are willing to sell at various prices.
- 2Demand is the quantity of a good or service that consumers are willing to buy at various prices.
- 3The law of demand states that as the price of a good decreases, the quantity demanded increases, and vice versa.
- 4The law of supply states that as the price of a good increases, the quantity supplied increases, and vice versa.
- 5Market equilibrium occurs where the quantity supplied equals the quantity demanded.
Simple Explanation
Supply and demand help us understand how prices work in markets. When prices are high, producers want to sell more, but consumers want to buy less. When prices are low, consumers want to buy more, but producers want to sell less. The point where the amount produced equals the amount bought is called market equilibrium.
Memory Trick
“Think of 'S' for Supply and 'D' for Demand as two friends trying to meet at a park. They adjust their positions until they find the perfect spot where both are happy — this is the equilibrium point.”
Flashcards
What does supply refer to?
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Exam Questions
Describe and explain the factors that can shift the demand curve. [6 marks]
6 marksView mark scheme hint▾
Discuss factors such as income, preferences, prices of substitutes and complements, and population changes.
Explain how a change in consumer preferences can affect the market equilibrium. [4 marks]
4 marksView mark scheme hint▾
Mention how increased demand shifts the demand curve and impacts price and quantity.
What is meant by equilibrium price? [2 marks]
2 marksView mark scheme hint▾
Define equilibrium price as the price where quantity supplied equals quantity demanded.
Practice Quiz
What is the law of demand?
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