Da VIP Academy / GED / Social Studies / Economics
Supply, Demand & Markets
Use supply and demand to explain prices, shortages, and surpluses.
How it works
The two laws
As price rises, buyers want less (demand falls) and sellers offer more (supply rises). Where the two quantities match is equilibrium — the market price.
Shortage vs surplus
Below equilibrium, buyers want more than sellers offer: a shortage. Above equilibrium, sellers offer more than buyers want: a surplus, which pushes prices down.
Worked examples
Find equilibrium in the data table.
- At $6, buyers want 500 and sellers offer 500.
- Quantities match.
- Equilibrium price = $6.
Words to know
- Equilibrium
- The price where quantity demanded equals quantity supplied.
- Scarcity
- Limited resources against unlimited wants.
Test-day tips
- • Find where the two columns are equal — that row is the answer to most of these items.