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9708 · 2.1

Demand and supply curves — practice questions

Practice and worked examples for 9708 Demand and supply curves. Short previews only — attempt the full question in MarkScheme against the official scheme.

Worked example 1

Income rises for a normal good. Show the effect on equilibrium P and Q.

Show solution outline

Normal good → demand shifts right (at each price, Qd higher).

New equilibrium: higher P and higher Q.

Supply unchanged in short run.

Worked example 2

The market for widgets has a demand function Qd = 200 - 10P and a supply function Qs = -40 + 20P, where P is the price in dollars. Calculate the equilibrium price and quantity.

Show solution outline
  1. Set Qd = Qs to find equilibrium price (P):* 200 - 10P = -40 + 20P
  2. Isolate P: Add 10P to both sides: 200 = -40 + 30P Add 40 to both sides: 240 = 30P
  3. Solve for P: P = 240 / 30 *P = 8∗∗8**
  4. Substitute P back into either equation to find equilibrium quantity (Q):** Using the demand equation: Qd = 200 - 10(8) = 200 - 80 = 120 Using the supply equation: Qs = -40 + 20(8) = -40 + 160 = 120
  5. Final Answer: The equilibrium price is $8 and the equilibrium quantity is 120 widgets.
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