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Social studies · Grades 8–12

Supply, demand and prices

Study guide for Grades 8 to 12: 2 worked examples and 2 practice questions. First decide whether the event changes how much is available (supply) or how much people want to buy (demand).

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Rule and key idea

First decide whether the event changes how much is available (supply) or how much people want to buy (demand). Then predict the price, holding everything else constant.

supply ↓ or demand ↑ → price ↑ · supply ↑ or demand ↓ → price ↓

Worked examples

A toy goes out of fashion, and far fewer people want it. Which change does this describe?

Lower supply or higher demand tends to push prices up; higher supply or lower demand tends to push prices down, other things being equal.

Demand decreased.

A city’s population grows quickly, and many more people want apartments. Which change does this describe?

Lower supply or higher demand tends to push prices up; higher supply or lower demand tends to push prices down, other things being equal.

Demand increased.

Try two questions

  1. A drought sharply reduces the wheat harvest. Which change does this describe?

    1. Supply increased.
    2. Demand increased.
    3. Demand decreased.
    4. Supply decreased.

  2. A drought sharply reduces the wheat harvest. Assuming nothing else changes, what will most likely happen to the price?

    1. It will stay exactly the same.
    2. It will most likely rise.
    3. It will most likely fall.

Answers and reasoning

Answers and marking notes
  1. Supply decreased.

    Lower supply or higher demand tends to push prices up; higher supply or lower demand tends to push prices down, other things being equal.

  2. It will most likely rise.

    Lower supply or higher demand tends to push prices up; higher supply or lower demand tends to push prices down, other things being equal.

How this page was made: written for StudyBrix with AI assistance from our own templates. Answers and worked examples are checked by automated tests, and grade bands are approximate, not an official curriculum alignment. See the editorial policy for corrections. Editorial policy