Economics · Unit 6
Supply and Demand
How buyers and sellers set the price
Supply and demand is the single most useful model in economics and the most frequently misapplied, because it describes competitive markets and gets used for everything.
The unit covers demand, supply, market price and equilibrium, surplus and shortage, and what makes each curve shift.
This unit breaks down into 23 short steps and 118 questions, starting at difficulty 1 and building to 5. Below you can see exactly what it covers, how the path is structured, and worked examples with explanations.
- Steps
- 23
- Questions
- 118
- Difficulty
- 1-5
What this unit covers
- Changes in Supply and Demand
- Surplus and Shortage
- Market Price and Equilibrium
- Demand
- Supply
Where this fits
The core of the track. Needed for almost everything after it.
Where people slip
Movement along a curve and a shift of the curve are different events with different causes. Price changes move you along; almost anything else shifts the whole curve.
How the unit is structured
Supply and Demand runs as 23 short steps that unlock in order. 17 are practice rounds and 6 are challenge rounds that pull together everything before them. Questions start at difficulty 1 and climb to 5 as you progress.
Challenge rounds
Example questions
30 real questions from this unit, with the answer and the reason behind it, grouped by what they practise. There are 118 in the unit altogether.
Changes in Supply and Demand
- Choose all that applyLevel 2
1. Which of these could make the DEMAND for a product go up?
- The product becomes very popularcorrect
- More people want to buy itcorrect
- People have more money to spendcorrect
- The product goes out of style
Popularity, more buyers, and more income all raise demand.
- Fill the blankLevel 2
2. When a bad storm destroys many crops, the supply of those crops usually ____.
- fallscorrect
- rises
- doubles
- stays the same
With fewer crops to sell, supply goes down.
- Match the pairsLevel 2
3. Match each event to what happens.
Answer: A product becomes very popular = Demand goes up; A great harvest of apples = Supply goes up; A storm ruins the crops = Supply goes down; People stop liking the product = Demand goes down
Popularity moves demand, while harvests and storms move supply.
- Multiple choiceLevel 2
4. A new fashion makes a toy super popular, so people want more of it at every price. This is called...
- An increase in demandcorrect
- A fall in supply
- A tax
- A shortage
When buyers want more at every price, demand increases.
- Sort into groupsLevel 2
5. Sort each event by what it mainly changes.
Answer: A heat wave makes people want cold drinks = Changes demand; A new fast machine lets a factory make more toys = Changes supply; A toy becomes a must-have trend = Changes demand; A storm ruins the apple harvest = Changes supply
Buyer events change demand, while seller and production events change supply.
- True or falseLevel 2
6. If people suddenly want much more of a product at every price, we say demand has increased.
Answer: True
Wanting more at every price is exactly an increase in demand.
Demand
- Fill the blankLevel 1
7. The amount of a good that buyers are willing to buy at each price is called ____.
- demandcorrect
- supply
- profit
- tax
Demand describes how much buyers want to buy at each price.
- Multiple choiceLevel 1
8. A toy shop drops the price of a popular toy. What usually happens to how many people want to buy it?
- It goes upcorrect
- It goes down
- It stays exactly the same forever
- It drops to zero
When a price falls, people usually want to buy more, which is the law of demand.
- True or falseLevel 1
9. The law of demand says that when a price goes up, people usually want to buy less.
Answer: True
Yes, higher prices usually mean a smaller quantity demanded.
- Choose all that applyLevel 2
10. Which of these usually make people want to buy MORE lemonade at a stand?
- The price of the lemonade dropscorrect
- It is a hot sunny daycorrect
- Everyone loves how it tastescorrect
- The price of the lemonade doubles
Lower prices, hot weather, and loving the product all raise how much people want to buy.
- Odd one outLevel 2
11. Three of these usually make buyers want MORE of a product. Which one does NOT?
- A much higher pricecorrect
- A lower price
- The product becoming very popular
- More people wanting it
A higher price usually makes buyers want less, not more.
- Guess the numberLevel 3
12. A cookie stand sees: at $1, 40 cookies wanted; at $2, 30 wanted; at $3, 20 wanted. Following the law of demand pattern, about how many are wanted at $4?
Answer: 10 cookies
Each $1 rise dropped the quantity by 10, so at $4 about 10 cookies are wanted.
Market Price and Equilibrium
- Fill the blankLevel 2
13. The price where supply and demand meet and balance is called the ____ price.
- equilibriumcorrect
- highest
- retail
- wholesale
At the equilibrium price, buyers' and sellers' amounts match.
- Multiple choiceLevel 2
14. The market price is best described as the price where...
- The amount buyers want to buy equals the amount sellers want to sellcorrect
- Sellers make the most product possible
- Buyers pay nothing at all
- The government sets a fixed number
The market settles where the quantity demanded equals the quantity supplied.
- Odd one outLevel 2
15. Three of these describe the equilibrium price. Which one does NOT?
- It is where sellers make as much as they possibly cancorrect
- It is where supply meets demand
- It is where the amount bought equals the amount sold
- It is the balancing price of the market
Equilibrium is about balance, not about making the largest possible amount.
- Put in orderLevel 2
16. Put these steps in order, from what buyers and sellers show to the price that results.
Answer: Buyers show how much they want at each price -> Sellers show how much they offer at each price -> The price moves until the two amounts match -> That balancing price is the equilibrium
The market price settles where the amount demanded and supplied become equal.
- True or falseLevel 2
17. Equilibrium is the price where the quantity buyers want to buy equals the quantity sellers want to sell.
Answer: True
That balance point is exactly what equilibrium means.
- Choose all that applyLevel 3
18. Which of these are true at the equilibrium price?
- Quantity demanded equals quantity suppliedcorrect
- There is no pressure for the price to changecorrect
- The market clearscorrect
- Sellers have lots of unsold goods
At equilibrium the market clears and there is no push to change the price.
Supply
- Fill the blankLevel 1
19. The amount of a good that sellers are willing to offer at each price is called ____.
- supplycorrect
- demand
- budget
- interest
Supply is how much sellers will offer at each price.
- Multiple choiceLevel 1
20. A lemonade stand can suddenly sell each cup for a higher price. What will the seller likely want to do?
- Make and sell more cupscorrect
- Make fewer cups
- Close the stand
- Give lemonade away for free
Higher prices encourage sellers to supply more.
- True or falseLevel 1
21. The law of supply says that higher prices usually make sellers want to sell more.
Answer: True
Yes, higher prices make selling more rewarding, so supply rises.
- Choose all that applyLevel 2
22. Which of these describe SUPPLY?
- It is the sellers' side of the marketcorrect
- It usually rises when prices go upcorrect
- It is how much producers offer for salecorrect
- It is how much buyers want to buy
Supply is the sellers' side and usually rises as prices rise.
- Match the pairsLevel 2
23. Match each word to what it belongs to.
Answer: Demand = The buyers' side; Supply = The sellers' side; Price goes up = Sellers offer more
Demand is buyers, supply is sellers, and higher prices raise the quantity supplied.
- Type the answerLevel 2
24. What word describes how much sellers are willing to make and offer for sale at each price?
Answer: supply
Supply is the sellers' side of the market.
Surplus and Shortage
- True or falseLevel 1
25. A surplus means there is too much of a product left unsold.
Answer: True
A surplus is leftover, unsold goods.
- Choose all that applyLevel 2
26. Which of these are true about a SHORTAGE?
- Buyers want more than is availablecorrect
- It often happens when the price is too lowcorrect
- Products can sell out quicklycorrect
- There are lots of unsold goods left over
A shortage means demand is greater than supply, so goods sell out.
- Multiple choiceLevel 2
27. A shortage happens when...
- Buyers want more than sellers offercorrect
- Sellers offer more than buyers want
- Everyone is happy with the amount
- There is far too much product
A shortage means buyers want more than is available at that price.
- Odd one outLevel 2
28. Three of these describe a SURPLUS. Which one does NOT?
- Buyers cannot find enough of the productcorrect
- Sellers have leftover goods
- The price may be too high
- There is more supply than demand
Not being able to find enough describes a shortage, not a surplus.
- Type the answerLevel 2
29. What do we call it when buyers want more of a product than is available, so it sells out? (one word)
Answer: shortage
A shortage is when demand is greater than the amount available.
- Match the pairsLevel 5
30. Match each policy or condition to its predicted result.
Answer: Price ceiling below equilibrium = Shortage; Price floor above equilibrium = Surplus; Free-market price above equilibrium = Surplus that pushes price down; Free-market price below equilibrium = Shortage that pushes price up
Ceilings below equilibrium cause shortages; floors above equilibrium cause surpluses.
Where these questions come from. Each unit starts as a plan of the concepts it should cover and the difficulty it should span. Questions are written against that plan with AI assistance, then checked by a validator that rejects anything without a single defensible answer, an explanation, or plausible wrong options. How we write questions sets out the whole process, and corrections are fixed in the bank and reach the site and the app the same day.
How you practise
This unit mixes 10 different question formats, so you are recalling and applying rather than recognising the same layout every time.
- Choose all that apply
- Fill the blank
- Guess the number
- Match the pairs
- Multiple choice
- Odd one out
- Put in order
- Sort into groups
- True or false
- Type the answer
Practise Supply and Demand
118 questions across 23 steps. Start with step one and crawl at your own pace.
Play this unitRead about Supply and Demand
Explainers from our blog on what this unit covers. Each one ends with real questions from the bank.
- Supply and Demand Explained in Simple TermsSupply and demand explain how buyers and sellers interact in markets. Learn why prices change, what shifts curves, and how shortages and surpluses can appear.August 13, 2026 · 5 min read
- What Is a Market Economy? How Prices and Choices Coordinate ActivityLearn how prices, private choices, supply and demand, competition, and government rules shape this economic system.August 14, 2026 · 6 min read
- Price Elasticity of Demand: How Buyers Respond to Price ChangesPrice elasticity of demand measures how strongly quantity demanded responds to a price change. Learn the formula, examples, and what elastic demand means.August 14, 2026 · 6 min read
- What Is Consumer Surplus? The Gap Between Willingness to Pay and PriceLearn what consumer surplus is, how willingness to pay differs from market price, and how economists use the idea to study gains from exchange and policy.August 17, 2026 · 5 min read
More units in Economics
- What is Economics?Scarcity, choices, and the cost of choosing
- Needs, Wants and ResourcesWhat we need, what we want, and limited resources
- Money and TradeFrom barter to money and prices
- Goods and ServicesProducers, consumers, and where things come from
- Earning, Spending and SavingPersonal money basics and budgeting
- Markets, Prices and CompetitionHow markets and competition work
- Businesses and ProductionFirms, costs, profit, and entrepreneurship
- Money, Banking and CreditBanks, interest, credit, and central banks