Market Equilibrium Shifts: Supply, Demand, and Apples!

Economics Grades High School 9:05 Video
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Lesson Description

Explore how changes in supply and demand impact market equilibrium, using the example of the apple market. Learn to analyze real-world scenarios and predict price and quantity shifts.

Video Resource

Changes in Market Equilibrium

Khan Academy

Duration: 9:05
Watch on YouTube

Key Concepts

  • Market Equilibrium
  • Supply and Demand Curves
  • Shifts in Supply
  • Shifts in Demand
  • Equilibrium Price and Quantity

Learning Objectives

  • Students will be able to define market equilibrium and explain its relationship to supply and demand.
  • Students will be able to identify factors that cause shifts in supply and demand curves.
  • Students will be able to analyze the impact of supply and demand shifts on equilibrium price and quantity.
  • Students will be able to apply these concepts to real-world scenarios.

Educator Instructions

  • Introduction (5 mins)
    Begin by reviewing the basic concepts of supply and demand. Ask students to define supply and demand and to describe what a supply and demand curve represents. Briefly discuss the concept of market equilibrium as the point where supply and demand intersect.
  • Video Viewing (10 mins)
    Play the Khan Academy video "Changes in Market Equilibrium." Instruct students to take notes on the examples used in the video (disease-resistant apples, apple cider ad campaign, apple pickers unionizing).
  • Guided Discussion (15 mins)
    Lead a class discussion using the discussion questions below. Focus on the logic behind the shifts in supply and demand, and how these shifts affect the equilibrium price and quantity. Use the apple examples from the video, encouraging students to explain the reasoning.
  • Interactive Exercise: Scenario Analysis (15 mins)
    Divide students into small groups. Provide each group with a different scenario that would impact the apple market (or another market of your choice). Have them analyze the scenario and determine whether it affects supply, demand, or both. They should then draw new supply and demand curves to illustrate the change and explain the impact on equilibrium price and quantity.
  • Wrap-up and Assessment (5 mins)
    Summarize the key concepts covered in the lesson. Assign the multiple-choice and fill-in-the-blank quizzes for assessment. These quizzes can be completed in class or assigned as homework.

Interactive Exercises

  • Supply and Demand Shift Graphing
    Students are given a scenario (e.g., a frost destroys half the apple crop). They must draw the initial supply and demand curves, identify which curve shifts, draw the shifted curve, and identify the new equilibrium point, explaining the change in price and quantity.
  • Market Scenario Creation
    Students create their own scenarios that would impact a market (of their choosing) and then analyze the effects on supply, demand, and equilibrium. They present their scenarios and analysis to the class.

Discussion Questions

  • How does a change in technology (like the disease-resistant apple) affect the supply curve?
  • Why does a change in consumer preference (like the study on apples preventing cancer) affect the demand curve?
  • In the apple cider ad campaign example, why does the demand for apples decrease?
  • What happens to the supply curve when the cost of labor increases (apple pickers unionizing)?
  • How do you determine whether a shift in supply or demand will lead to a higher or lower equilibrium price?

Skills Developed

  • Critical Thinking
  • Problem-Solving
  • Analytical Skills
  • Economic Reasoning
  • Graph Interpretation

Multiple Choice Questions

Question 1:

What is market equilibrium?

Correct Answer: The point where supply equals demand.

Question 2:

What happens to the equilibrium price when demand increases and supply remains constant?

Correct Answer: It increases.

Question 3:

A new technology that lowers the cost of producing a good will cause the supply curve to:

Correct Answer: Shift to the right.

Question 4:

If the price of a substitute good increases, what happens to the demand for the original good?

Correct Answer: It increases.

Question 5:

What happens to the equilibrium quantity when supply decreases and demand remains constant?

Correct Answer: It decreases.

Question 6:

An advertising campaign that promotes the health benefits of a product is most likely to:

Correct Answer: Increase demand.

Question 7:

If both supply and demand decrease, what happens to the equilibrium quantity?

Correct Answer: It decreases.

Question 8:

If supply increases and demand decreases, what definitely happens to the equilibrium price?

Correct Answer: It decreases.

Question 9:

An increase in the cost of labor for a producer will likely cause:

Correct Answer: A decrease in supply.

Question 10:

If the government imposes a price ceiling below the equilibrium price, what is likely to occur?

Correct Answer: A shortage.

Fill in the Blank Questions

Question 1:

The point where the supply and demand curves intersect is known as the market ________.

Correct Answer: equilibrium

Question 2:

A shift to the right in the demand curve represents an ________ in demand.

Correct Answer: increase

Question 3:

If the cost of resources to produce a good increases, the supply curve will shift to the ________.

Correct Answer: left

Question 4:

When demand increases and supply remains constant, the equilibrium price will ________.

Correct Answer: increase

Question 5:

If a surplus exists in the market, the price is likely ________ the equilibrium price.

Correct Answer: above

Question 6:

A new study showing the health benefits of a product will likely cause ________ in demand for that product.

Correct Answer: increase

Question 7:

When both supply and demand increase, the equilibrium ________ will also increase.

Correct Answer: quantity

Question 8:

If the price of a complementary good decreases, the demand for the original good will ________.

Correct Answer: increase

Question 9:

An increase in wages for workers will likely lead to a ________ in supply.

Correct Answer: decrease

Question 10:

Government subsidies to producers can lead to an ________ in supply.

Correct Answer: increase

Educational Standards

SOC.9-12.E.3.1:Analyze how price and non-price factors affect the demand and supply of goods and services available in the marketplace. SOC.9-12.E.1.1:Define and apply basic economic concepts of money supply, scarcity, surplus, choice, opportunity cost, cost/benefit analysis, risk/reward relationship, incentive, disincentive, and trade-off to a variety of economic situations. SOC.9-12.E.10.3:Explain how changes in supply and demand cause prices to change and in turn, cause buyers and sellers to change, including changes in price of productive resources and technologies used to make the product, profit opportunities available to producers for selling other products, number of sellers in a market, consumer incomes, consumer options, and the number of consumers in a market.

Teaching Materials

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