Supply and demand — Economics, 11–13 years
How the amount sellers offer and buyers want helps shape a market price. Economics, 11–13 years.
The meeting point
A market brings together people who want to buy and people who want to sell. Demand is how much buyers want at different prices; supply is how much sellers offer. When these amounts meet, they help push the price towards a level where trades can happen.
Why look at both sides?
A price cannot be understood by looking only at buyers or only at sellers. If many people want a limited number of concert tickets, buyers may offer more. If sellers have too many unsold tickets, they may lower the price. Supply and demand explain this pressure from both sides.
A fruit stall
A stall has 10 cups of strawberries at €2 each, and 10 shoppers want one cup, so all can buy. On a hot day, 20 shoppers want a cup but the stall still has 10. The seller may raise the price to €3, and some shoppers may decide not to buy. Fewer buyers and the limited supply meet again.
The price is not chosen by one side
It is tempting to say that sellers always choose the price, because the price is written on the label. But a seller who asks too much may sell nothing, while a buyer who offers too little may find no seller. The final price is shaped by what both sides can and will do.
Markets in real life
You can see this after a popular game console is released, when many people want one but shops have few. Prices may rise or stock may disappear. Later, when factories make more and excitement fades, supply grows and demand falls, so prices often settle. This pattern is useful, but it does not predict every price exactly.
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