Market Equilibrium: Where Supply Meets Demand
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What students do
- Locate the equilibrium price and quantity where the demand and supply curves cross for Bella's Pizza Kitchen
- Diagnose a surplus versus a shortage from three price points on the same supply-and-demand chart
- Calculate the size of a surplus or shortage by subtracting quantity demanded from quantity supplied, or the reverse
- Explain how a market self-corrects, tracing why a surplus pushes the price down and a shortage pushes it up
What it covers
- How the demand curve built in one lesson and the supply curve built in another cross to set a single market price
- What a surplus looks like when the price sits above equilibrium, and what a shortage looks like when it sits below
- Why an unregulated price does not stay away from equilibrium for long
Learning targets
- Define MARKET EQUILIBRIUM and find the EQUILIBRIUM PRICE and EQUILIBRIUM QUANTITY where the demand and supply curves cross
- Identify a SURPLUS (price above equilibrium) and a SHORTAGE (price below equilibrium), and read each one off a supply-and-demand chart
- Explain HOW a market self-corrects - a surplus pushes the price DOWN and a shortage pushes the price UP, back toward equilibrium
From one teacher to another
Demand and supply groundwork from the last two units finally pays off here, once both curves land on the same chart for the first time. Students spend most of the activity reading three price points off the same pizza market, so the surplus, the shortage, and the equilibrium all end up as readings of one picture instead of separate ideas. It's the self-correction piece, that a surplus pushes price down and a shortage pushes it up, that I most want them to explain out loud by the end.
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