Market Forces in Action

Overview

Lesson 4 of 10 in Economic Choices and Change. Students investigate how supply and demand influence price through a classroom trading simulation, then explain equilibrium, shortages and surpluses using evidence from their observations.

Learning intentions

Students will:

• Define supply, demand, equilibrium, shortage and surplus.
• Model how buyers and sellers influence market price.
• Record and interpret evidence from a trading activity.
• Explain how changes in supply or demand affect markets.

Success criteria

• I can distinguish between supply and demand.
• I can identify a shortage, surplus and equilibrium in a market.
• I can use observations from the simulation as evidence.
• I can write a clear supply-and-demand explanation for my portfolio.

Curriculum links

• Understand economic systems and how individuals, businesses and governments make choices.
• Analyse how supply, demand and price influence the allocation of resources.
• Use inquiry skills to gather, organize and interpret information.
• Communicate conclusions using economic terminology and supporting evidence.

Lesson structure (30 minutes)

1. 0–3 min – Hook and prediction Open with the market hook and prediction question. Display two scenarios: ten students want the same concert ticket, and ten tickets are available but only two students want them. Students predict what might happen to the price in each case. Briefly introduce the idea that markets respond to choices.

2. 3–7 min – Teach the key concepts Use the supply-and-demand concept slides to define:

• Demand: how much buyers are willing and able to purchase.
• Supply: how much sellers are willing and able to provide.
• Equilibrium: the point where the amount supplied matches the amount demanded.
• Shortage: demand is greater than supply.
• Surplus: supply is greater than demand. Emphasise that price is a signal that can influence both buyers and sellers.

3. 7–10 min – Set up the trading market Distribute the market simulation recording sheet. Divide the class into five groups of six. In each group, assign three buyers and three sellers. Give buyers different maximum prices they are willing to pay and sellers different minimum prices they are willing to accept. Keep these values private. Explain that each round lasts one minute. Buyers seek to purchase one unit; sellers seek to sell one unit. A trade occurs only when both agree on a price.

4. 10–17 min – Conduct three trading rounds Run the first round with a balanced number of buyers and sellers. Students negotiate and record successful trades and prices on the market simulation recording sheet. Before the second round, announce that a popular online video has made the product highly desirable. Increase demand by adding two buyers or giving buyers higher maximum prices. Run the round and ask students to notice changes in price and unsatisfied buyers. Before the third round, announce that a new supplier has entered the market. Add two sellers or reduce sellers’ minimum prices. Run the round and ask students to notice unsold products and changing prices.

5. 17–22 min – Debrief the simulation Return to the simulation debrief slides. Ask:

• Which round showed a shortage? What evidence supports this?
• Which round showed a surplus?
• In which round did the market move closest to equilibrium?
• How did buyers’ and sellers’ decisions affect price? Groups compare their recorded data. Clarify that a real market may not reach perfect equilibrium immediately.

6. 22–28 min – Portfolio explanation Students independently complete the explanation section of the market simulation recording sheet. Their response must identify one shortage, one surplus and the approximate equilibrium price or range from the simulation. Require the sentence frame: “When ___ changed, ___ happened because ___.” Students should include at least two observations as evidence.

7. 28–30 min – Exit check Use the final review and exit question. Students respond verbally or on the bottom of the worksheet: “If supply decreases while demand stays the same, what is likely to happen to price, and why?” Collect worksheets as portfolio evidence.

Resources

• the supply-and-demand lesson deck
• the market simulation recording sheet
• Small classroom items to trade, such as counters, pencils or paper tokens
• Buyer cards or privately assigned maximum prices
• Seller cards or privately assigned minimum prices
• Board or chart paper
• Timer
• One recording sheet per student

Assessment

• Observe negotiations and listen for accurate use of supply, demand, shortage, surplus and equilibrium.
• Check worksheets for correctly recorded trades, prices and observations.
• Assess the portfolio explanation for a correct relationship between a market change and its effect on price, supported by evidence.

Differentiation

• Provide a vocabulary bank and the sentence frame “When supply/demand ___, price tends to ___ because ___.”
• Pair students strategically and assign roles such as buyer, seller, recorder or observer to support participation.
• For EAL learners and students requiring additional support, use the visual definitions in the supply-and-demand concept slides and allow oral rehearsal before writing.
• Extend learning by asking students to predict what would happen if both supply and demand increased at the same time, explaining why the outcome may be uncertain.