IGCSE ECON
This guide explores the dynamics of price determination in economics by analyzing shifts in demand and supply. We discuss scenarios where demand may decrease, providing three compelling reasons supported by a graphical representation. Additionally, we examine how a fall in income can paradoxically boost demand for certain products. Furthermore, we illustrate equilibrium price with a supply and demand diagram while tackling concepts of excess supply and demand, using the housing market as an example. Lastly, we explore how price changes affect demand and supply curves.
IGCSE ECON
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Presentation Transcript
IGCSE ECON How Prices are determined _chap 7
A Try to draw the situation, which happens when demand shifts to the left. Use the table to give 3 reasons why this may happen • When might a fall in incomes lead to an increase in the demand for a product and vice versa?
Try to draw a supply and demand diagram showing equilibrium price and quantity • Do the same for excess supply and excess demand. • Using housing as an example try to explain excess supply and demand in your own words
If there is a fall in demand the opposite happens. Draw the diagram to show the effect of a fall in demand, where the demand curve shifts to the left. • If there was a change in price of mars bars, why wouldn’t the demand curve shift?
Again do the same for a fall in supply where the supply curve shifts to the left
Try to do the same for the supply curve • a) price increase • b) price decrease
