FOCUS QUESTION

How do supply and demand determine market price?

The map breaks this topic into its core concepts, connected by labeled relationships. Each link is written so it can be read as a complete statement — not just an unlabeled line between boxes.

Concepts and relationships

  • Market Price shaped by Supply.
  • Market Price shaped by Demand.
  • Supply meets demand at Equilibrium.
  • Demand meets supply at Equilibrium.
  • Surplus pushes down Market Price.
  • Shortage pushes up Market Price.

How to read this map

See how supply and demand meet at equilibrium, and how a surplus pushes price down while a shortage pushes it up.

Learning objectives

  • Define supply and demand.
  • Explain market equilibrium.
  • Distinguish surplus and shortage.
  • Predict how price responds.
Review standard: The model reflects widely taught introductory economics. Sources: Standard introductory economics references.