Module 3: Supply and Demand

Why this module matters

It helps learners connect Module 3: Supply and Demand to the broader course path in Principles of Microeconomics — Part 2: Supply & Demand. Learners build working familiarity with Demand, Supply, and Equilibrium. The lessons stay grounded in concrete examples and explanations tied to this module's core topics. Learners can check understanding through 26 quiz questions tied to this module.

What this module covers

• Demand
• Supply
• Equilibrium
• When we talk about changes, we make a crucial distinction between a "change in demand" and a "change in quantity demanded." (The same is true for the supply side.
• The supply and demand model is a basic but very powerful way to analyze prices and markets.
• Draw supply and demand graphs

Topical takeaways

• When we talk about changes, we make a crucial distinction between a "change in demand" and a "change in quantity demanded." (The same is true for the supply side.
• The supply and demand model is a basic but very powerful way to analyze prices and markets.
• If there are more buyers, demand will be higher and if there are fewer people, demand will be lower.
• So that equilibrium price is the market will arrive at that just through interactions of buyers and sellers.
• Equilibrium in the market is really a dynamic process and I want to This lesson is a transcript of Professor Sara Solnick's , Video 1 lecture.
• So we have a demand and supply curve here, and we know that the equilibrium is where the curves cross.

Lesson arc

1. Module 3 Overview: Supply and Demand (10 min)

   When we talk about changes, we make a crucial distinction between a "change in demand" and a "change in quantity demanded." (The same is true for the supply side.

   • When we talk about changes, we make a crucial distinction between a "change in demand" and a "change in quantity demanded." (The same is true for the supply side.
   • The supply and demand model is a basic but very powerful way to analyze prices and markets.
   • If there are more buyers, demand will be higher and if there are fewer people, demand will be lower.
2. Video 1: - Equilibrium in the market is really a dynamic process and I want to (6 min)

   So that equilibrium price is the market will arrive at that just through interactions of buyers and sellers.

   • So that equilibrium price is the market will arrive at that just through interactions of buyers and sellers.
   • Equilibrium in the market is really a dynamic process and I want to This lesson is a transcript of Professor Sara Solnick's , Video 1 lecture.
   • So we have a demand and supply curve here, and we know that the equilibrium is where the curves cross.
3. Video 2: - So I want to show that even with this super simple demand and (8 min)

   So I want to show that even with this super simple demand and This lesson is a transcript of Professor Sara Solnick's , Video 2 lecture.

   • So I want to show that even with this super simple demand and This lesson is a transcript of Professor Sara Solnick's , Video 2 lecture.
   • Lecture Transcript So I want to show that even with this super simple demand and supply model, we haven't even gotten all the way into this unit, we can already analyze a policy that is kind of popular.
   • Well, oh, let me say this is a price ceiling because this is like a maximum.
4. Video 3: what happens when one of the curves shifts (4 min)

   So these are all the outcomes of price and quantity when we have shifts in demand and supply.

   • So these are all the outcomes of price and quantity when we have shifts in demand and supply.
   • Demand curve is shifting to the right, so with every single price, like this original price, quantity demand is higher at this price.
   • I mean, on an exam, I, myself, still after all these years, you know, I'll draw a quick little demand and supply curve and move that curve over and see what happens.
5. Video 4: this handout is available on Blackboard and I use it to go through (5 min)

   Video 4: this handout is available on Blackboard and I use it to go through.

   • Video 4: this handout is available on Blackboard and I use it to go through.
   • Lecture Transcript So this handout is available on Blackboard and I use it to go through what happens when the demand and supply curves shift.
   • So the middle box, there's no change in demand, no change in supply so that means no change.
6. Video 5: Going to go over these practice problems (6 min)

   The families are the buyers of preschool services, and so, since we have fewer buyers, we're going to have a decrease in demand.

   • The families are the buyers of preschool services, and so, since we have fewer buyers, we're going to have a decrease in demand.
   • The price is going to want to move down there and it gets there by the suppliers want to capture one of these scarce buyers, and they will cut the price.
   • So you can really see, these are substitutes because it's different brands of the same products that are used, instead of each other.

Key concepts

• Demand
• Supply
• Equilibrium
• Price ceiling
• Price floor
• Shortage
• Surplus

Practice and assessment

Learners reinforce this module through 26 quiz questions and a supporting glossary covering 7 key terms, with practice centered on When we talk about changes, we make a crucial distinction between a "change in demand" and a "change in quantity demanded." (The….

Concept glossary

Demand

The relationship between the price of a good and the quantity consumers are willing and able to buy, holding other factors constant.

Supply

The relationship between the price of a good and the quantity producers are willing and able to sell, holding other factors constant.

Equilibrium

The market condition where quantity demanded equals quantity supplied — there is no tendency for price or quantity to change.

Price ceiling

A legally imposed maximum price; if binding (below equilibrium), causes a shortage.

Price floor

A legally imposed minimum price; if binding (above equilibrium), causes a surplus.

Shortage

The situation when quantity demanded exceeds quantity supplied at the current price.

Surplus

The situation when quantity supplied exceeds quantity demanded at the current price.

Continue to the full course

Principles of Microeconomics — Part 2: Supply & Demand is the parent course for this module. Use the full course page for pricing, certificate details, and the full curriculum.