Demand and supply curves
Demand and supply curves: build the core model, apply it to evidence and qualify conclusions where outcomes depend on context.
9708 section 2.1; AS Level. Checked against Cambridge's 2026–2028 Version 2 (latest version published December 2025) and 2029 Version 1 (published September 2026). Cambridge states that neither version has significant changes affecting teaching. Always follow the syllabus for the candidate's examination year.
Before you begin
Work on paper. Try each question before revealing help, and explain why your method works.
Quick readiness check
What causes a movement along a demand curve, other things equal?
What you will learn
- Define effective demand and distinguish individual from market demand
- Explain determinants and shifts of demand and supply
- Distinguish curve shifts from movements along curves
Core model and terms
Effective demand is willingness and ability to pay. Market demand sums individual demand at each price; market supply sums firms’ planned supply. A change in the product’s own price causes a movement along a curve, other things equal.
Apply and evaluate
Income, tastes, related-good prices and expectations can shift demand. Costs, technology, taxes, subsidies and conditions can shift supply. Always identify the determinant, state which curve shifts, and then trace the new equilibrium rather than moving a curve because price itself changed.
Pause and explain
Which statement best applies demand and supply curves?
Worked example
Household incomes rise and bus travel is a normal good. Predict the demand-curve change.
Show the worked solution
- Income is a non-price determinant
- Demand shifts right
- At each fare, planned journeys are higher
Answer Income is a non-price determinant → Demand shifts right → At each fare, planned journeys are higher
Try a topic test
Choose Easy, Normal or Difficult. Save your answers and open worked review after finishing.
Test this topic →From guided practice to a new situation
Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.
Household incomes rise and bus travel is a normal good. Predict the demand-curve change.
Give me a hint
Identify the relevant idea in demand and supply curves, then trace the economic chain.
Compare my reasoning
- Income is a non-price determinant
- Demand shifts right
- At each fare, planned journeys are higher
Income is a non-price determinant Demand shifts right At each fare, planned journeys are higher
Look for these in your work
- Income is a non-price determinant
- Demand shifts right
- At each fare, planned journeys are higher
A bad harvest reduces wheat supply while demand is unchanged. Predict the initial market direction.
Give me a hint
Shift supply before reading the new intersection.
Compare my reasoning
- Supply shifts left
- The equilibrium price tends to rise
- Equilibrium quantity tends to fall
Supply shifts left The equilibrium price tends to rise Equilibrium quantity tends to fall
Look for these in your work
- Supply shifts left
- The equilibrium price tends to rise
- Equilibrium quantity tends to fall
The price of coffee rises and buyers purchase less coffee. Is this a demand shift?
Give me a hint
Separate own-price change from other determinants.
Compare my reasoning
- The good’s own price changed
- Quantity demanded falls along the same curve
- A demand shift needs a non-price determinant
The good’s own price changed Quantity demanded falls along the same curve A demand shift needs a non-price determinant
Look for these in your work
- The good’s own price changed
- Quantity demanded falls along the same curve
- A demand shift needs a non-price determinant
A fall in bus fares occurs while petrol prices rise. Explain why total car demand cannot be inferred from one fact alone.
Give me a hint
Compare substitution effects and other determinants.
Compare my reasoning
- Cheaper bus travel may reduce car demand
- Costlier petrol may also reduce car demand
- The net change depends on size and other conditions
Cheaper bus travel may reduce car demand Costlier petrol may also reduce car demand The net change depends on size and other conditions
Look for these in your work
- Cheaper bus travel may reduce car demand
- Costlier petrol may also reduce car demand
- The net change depends on size and other conditions
Common mistakes
- Calling a change in quantity demanded a curve shift when only the good’s own price changed.
What can you explain now?
What causes a movement along a demand curve, other things equal?
Compare with the explanation
A change in the good’s own price
Income and population are non-price determinants that can shift demand.
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Make it stick
Before moving on, explain the central idea in demand and supply curves and state one condition that could change its effect.
If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.