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movement along
The other demand conditions are held fixed.
O Level · English Medium · Cambridge · Economics
Markets, demand and supply
Use demand and supply to explain a price change under stated conditions.
Shared cross-level core and stretch unit. Start with the core questions, then use the stretch example for deeper work. The same unit is available in related class and board pathways; it is not a full grade-specific or examination-specification course. A teacher should select the appropriate depth and further topics.
Learn the idea
Demand relates quantities buyers are willing and able to buy to prices, other things equal. A price change moves along a demand curve; income or preferences can shift it. Supply reflects sellers’ quantities at prices. Equilibrium in the simple model occurs where planned quantities match.
Worked example
If demand increases while supply is unchanged and upward sloping, equilibrium price and quantity tend to rise in the model. A change in price alone is not described as a shift of demand.
- Identify what changed first.
- Decide movement or shift.
- Trace the new intersection and state assumptions.
Stretch example
Price elasticity of demand compares proportional quantity response with proportional price change. Using the initial-value method, a 10% quantity fall after a 5% price rise gives elasticity −2; its magnitude 2 means a proportionally larger quantity response in that example.
Your written practice
Show your working on paper and enter your answer here. If it does not match, compare the model and try again.
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20
50−30 = 20.
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20
100−2P=20+2P gives P=20.
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It can lower unit costs or allow more output at each price.
Explain a supply-side mechanism.
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Supply may have fallen or several factors may have changed.
Give an alternative explanation.
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2
12/6 = 2.
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Different percentage bases and adjustment periods can change the result.
Explain what the comparison depends on.
Market case
Draw a supply-demand diagram for a fictional crop after a supply disruption.
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- Label the initial and shifted curves.
- Trace price and quantity.
- Avoid claiming a real forecast from the diagram alone.
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