Supply & Demand - Explaining Changes in Equilibrium

This activity allows students to practice their knowledge of:-

- Non-price determinants of Supply and Demand and how these influence equilibrium price and quantity
- Explaining how market forces lead to changes in equilibrium price and quantity

It also allows students to practice their skill of:-

- Using Economics terminology to explain changes in equilibrium price and quantity

This resource contains a Powerpoint presentation which introduces students to the template of how to do the explanation. There is also a worksheet which can be given during class or for homework.

Students are presented with a particular market (e.g. Pink T-Shirts in Japan) and then an event that leads to a change in Supply or Demand. Students will need to explain how the equilibrium price and quantity will change using the theory of market forces and shortages/surpluses.

Teachers can add difficulty by teaching the signalling, incentive and rationing functions of price and how supply and demand leads to changes in the allocation of resources.