Demand and Supply as Curves
A demand schedule and a supply schedule become two curves on the same axes: quantity demanded falls as price rises, quantity supplied rises with it. Reading a quantity off a price, and a price off a quantity, is the basic move the rest of the model is built from.
What a learner can do afterwards
- Plot a demand curve and a supply curve from a table of prices and quantities
- State the law of demand and the law of supply and give a reason for each, not just the direction
- Read both quantities at a stated price and say which one is larger
1 · Read
A market starts with two lists. Buyers take 10 apples at 1 coin, 6 at 2 coins and 3 at 3 coins, while sellers offer 2 at 1 coin, 6 at 2 and 10 at 3. You are willing and able to buy at each price on one side, and willing and able to sell on the other.
Drawn on shared axes, the buyer list slopes down and the seller list slopes up. To read a quantity, pick a price on the price axis, run across to the curve, then down to the quantity axis. At 3 coins the curves read 3 wanted and 10 offered, so supply is larger there.
The law of demand says quantity wanted falls as price rises, because some buyers leave or switch to a rival good. The law of supply says quantity offered rises with price, because higher prices draw in higher-cost sellers. Each slope has its reason, not just its direction.
Keep the two readings side by side at one price before judging anything. Comparing them is the basic move the rest of the model builds on.
Demand slopes down, supply slopes up, and each point pairs one price with one quantity.
2 · Watch
Take it off screen
Where it sits
Where this leads
8 questions wait behind this lesson, each with its answer explained. Every answer feeds the sky: stars light as they are learned, and dim when it is time to come back.