8th grade · Social Studies · Unit 10 of 12
Supply & Demand
How buyers and sellers set prices
What your child practices
How supply and demand set prices in markets, shortages and surpluses, competition, and the roles of buyers, sellers and profits.
Arizona Academic Standards learning standard: 8.E3.2; 8.E3.1 · how supply, demand and competition influence prices, and the roles of buyers, sellers and profits
How we explain it
Children can open this short lesson before they practice.
- More sellers or cheaper production raise supply; changes in what buyers want shift demand.
- If the price is above equilibrium, supply is more than demand: a surplus. Below it, demand is more than supply: a shortage.
- Find the size: subtract the smaller amount from the larger one at that price.
Example: At $6, buyers want 40 and sellers offer 70. What happens? Sellers offer more than buyers want. That is a surplus. 70 − 40 = 30. Answer: a surplus of 30
Supply & Demand in Arizona
In the Arizona Academic Standards, this is unit 10 of 12 in 8th grade Social Studies, after Money Smarts and before Markets & the Economy.
Gradelings describes a child's practice on this unit as Beginning, Approaching, Meeting or Exceeding (Four practice steps). That reflects practice, not a report-card mark: the teacher decides the mark.
- 8th grade guide for Arizona parents
- Printable 8th grade Social Studies sheet
- Arizona report cards explained
Source: Arizona Department of Education
Sample questions
A taste of this unit. In the app, questions change every time and get easier or harder to match your child.
Question 1
New machines make bike frames faster. What happens in the market for bicycles?
- supply increases
- demand decreases
- supply decreases
- demand increases
supply increases
Hint: Ask: does this change how much buyers want (demand) or how much sellers can offer (supply)? Here, supply increases.
Question 2
Use the table. What is the equilibrium price?
Market for a good Price Quantity demanded Quantity supplied $3 90 10 $4 70 30 $5 50 50 $6 30 70 $7 10 90 - $5
- $3
- $7
- $4
$5
Hint: Equilibrium is where quantity demanded equals quantity supplied.
Question 3
Use the table. If the price is set at $4, what happens?
Market for a good Price Quantity demanded Quantity supplied $2 50 20 $3 40 40 $4 30 60 $5 20 80 $6 10 100 - no shortage or surplus
- a shortage of 30
- a surplus of 60
- a surplus of 30
a surplus of 30
Hint: Compare demanded (30) and supplied (60). More demanded than supplied is a shortage; more supplied is a surplus.
Question 4
Many people develop a taste for almonds instead. What will most likely happen to the equilibrium price of hazelnuts?
- it falls
- it stays exactly the same
- it rises
it falls
Hint: Demand decreases, so the price falls.
Question 5
A band becomes very popular. What happens in the market for concert tickets?
- supply increases
- demand increases
- supply decreases
- demand decreases
demand increases
Hint: Ask: does this change how much buyers want (demand) or how much sellers can offer (supply)? Here, demand increases.
Question 6
Factories find a cheaper way to make umbrellas. What will most likely happen to the equilibrium price of umbrellas?
- it rises
- it falls
- it stays exactly the same
it falls
Hint: Supply increases, so the price falls.