AQA A-level Economics: Shifts in Market Equilibrium
AQA A-level Economics lesson on shifts in market equilibrium, covering demand and supply changes, shortages, surpluses and price adjustment.
This complete lesson explores the enquiry question: Why do market prices change? It begins with a retrieval Connect on equilibrium, shortages, surpluses and curve shifts before guided questioning shows students what happens when demand or supply changes from an initial equilibrium. Students construct diagrams and causal chains for increases and decreases in demand and supply, apply the model independently to concert-weekend hotel prices, and finish by correcting a faulty equilibrium explanation.
Students learn how to:
explain how shifts in demand or supply change market equilibrium;
identify the shortage or surplus created at the old equilibrium price;
explain how price adjusts towards a new equilibrium;
distinguish a curve shift from the subsequent movements along demand and supply curves;
predict changes in equilibrium price and quantity;
construct and explain demand and supply diagrams using complete causal chains.
The lesson begins with a heatwave and the ice-cream market, where students work out why an increase in demand creates a shortage at the original price and how rising prices restore equilibrium. They then reverse the reasoning using an electric-scooter example before analysing supply changes through a drought affecting olive oil and new technology reducing the cost of producing solar panels.
Students also connect these adjustments to the price mechanism, considering how prices ration scarce goods, signal changing market conditions, create incentives and help allocate resources. They finally apply the model independently to hotel prices during a major concert weekend, using evidence on bookings, prices and room availability to test the predictions of the demand and supply model.
The accompanying teacher guide supports delivery with guided questioning, expected responses and misconception prompts.
This lesson follows Market Equilibrium and completes the core demand-and-supply foundations before the Price Determination sequence moves on to elasticity and the interrelationship between markets.