Demand and Supply in Product Markets

What Demand and Supply in Product Markets covers

Demand and Supply in Product Markets is AS content, examined in both AS Unit 1 and AS Unit 2, which each cover the full AS content. 156 recall questions across 9 subtopics.

The 9 subtopics

Each one has its own page.

• Factors influencing demand and supply in product markets: Product marketRecall questions on A product market, The objectives of economic agents and The importance of marginal utility in the derivation of demand curves.Open →
• Factors influencing demand and supply: Main influences on demand and supply in product marketsRecall questions on The main influences on demand and supply in product markets, Why demand curves normally slope downward from left to right, Why supply curves will normally slope upward from left to right.Open →
• The determination of equilibrium price: Equilibrium price and output, and disequilibriumRecall questions on Equilibrium price and output, and disequilibrium, Movements along and shifts of the demand and supply curves.Open →
• The determination of equilibrium price: How the market adjusts to a new equilibriumRecall questions on How the market adjusts to a new equilibrium.Open →
• The determination of equilibrium price: Consumer and producer surplus on the diagramRecall questions on Consumer and producer surplus on the diagram.Open →
• Consumer and producer surplusRecall questions on Consumer and producer surplus.Open →
• Price, income and cross price elasticities: Price elasticity of demandRecall questions on Price elasticity of demand.Open →
• Price, income and cross price elasticities: Income and cross price elasticity of demandRecall questions on Income and cross price elasticity of demand.Open →
• Price, income and cross price elasticities: Price elasticity of supply, uses of elasticity and tax incidenceCalculating and interpreting price elasticity of supply, how firms and government use the four elasticities, and how elasticity decides who bears an indirect tax or gains from a subsidy, with the Soft Drinks Industry Levy as a case.Open →

What you need to know

Answer each one before you reveal it.

Take Demand and Supply in Product Markets further

The same content, four other ways.

Commonly confused

Pairs that lose marks when they are blurred together.

• Movement along a demand curve vs Shift of a demand curve

  Movement along a demand curve: a change in the quantity bought caused by a change in the good’s own price. Shift of a demand curve: a change in the quantity bought at every price, caused by a non-price factor.

• Equilibrium price vs Disequilibrium

  Equilibrium price: the price at which the quantity buyers want equals the quantity sellers offer. Disequilibrium: any price at which the two quantities differ, leaving a shortage or a glut.

• Price elasticity of demand vs Income elasticity of demand

  Price elasticity of demand: the responsiveness of the quantity bought to a change in the price of the good. Income elasticity of demand: the responsiveness of the quantity bought to a change in consumer income.

Questions from this topic

Each one with the model answer underneath.

1. 1

   What is a product market?

   Model answer

   A market where finished goods and services are bought and sold between producers and consumers.

2. 2

   What is the primary objective assumed for firms in economic analysis?

   Model answer

   To maximise profits.

3. 3

   What is the primary objective that consumers are assumed to pursue in economic theory?

   Model answer

   Consumers are assumed to seek to maximise satisfaction or utility.

4. 4

   Why do economists assume that consumers aim to maximise utility when making purchasing decisions?

   Model answer

   This assumption provides a rational basis for predicting consumer behaviour, as it implies consumers will allocate their limited income to purchase goods and services that give them the greatest total satisfaction.

5. 5

   What behavioural assumption is made about both firms and consumers in standard economic analysis?

   Model answer

   They are assumed to behave rationally.

6. 6

   Define marginal utility.

   Model answer

   The additional satisfaction gained from consuming one more unit of a good or service.

What is inside Levo

Six ways to work the same material.

Demand and Supply in Product Markets revision questions

What does Demand and Supply in Product Markets cover in WJEC A-Level Economics?

9 subtopics: factors influencing demand and supply in product markets: product market, factors influencing demand and supply: main influences on demand and supply in product markets, the determination of equilibrium price: equilibrium price and output, and disequilibrium, the determination of equilibrium price: how the market adjusts to a new equilibrium, the determination of equilibrium price: consumer and producer surplus on the diagram, consumer and producer surplus, price, income and cross price elasticities: price elasticity of demand, price, income and cross price elasticities: income and cross price elasticity of demand and price, income and cross price elasticities: price elasticity of supply, uses of elasticity and tax incidence. Each one has its own page with questions and model answers.

How is Demand and Supply in Product Markets organised?

By the WJEC 1520QS specification, subtopic by subtopic, so it matches the order you are taught it in.