Exploring the Dynamics of Supply and Market Equilibrium
Subject: Economics
Class: SS 1
Term: First Term
Week: 6
Age: 14-16 years
Topic: Concept of Demand and Supply (Continued)
Sub-topic: Definition and Law of Supply, Supply Schedules and Curves, Determinants of Equilibrium Price
Duration: 80 minutes
Behavioral Objectives
By the end of the lesson, students should be able to:
- Define supply and state the law of supply.
- Explain and interpret supply schedules.
- Illustrate supply curves.
- Identify the factors that determine the equilibrium price in a market.
Keywords
- Supply
- Law of Supply
- Supply Schedule
- Supply Curve
- Equilibrium Price
Set Induction
The teacher will start by reviewing the concepts of demand and demand curves from the previous lesson, relating these to how producers make decisions on supply based on market conditions.
Entry Behavior
Students have a basic understanding of demand and its effect on price.
Learning Resources and Materials
- Economics textbooks
- Whiteboard and marker
- Graph paper
- Sample data on price and quantity supplied
Building Background/Connection to Prior Knowledge
Students understand how demand influences price and will learn how supply operates in a similar manner but from the producer’s perspective.
Embedded Core Skills
- Data interpretation
- Graphing
- Critical thinking
Learning Materials
- Printed supply schedule examples
- Graphing tools (graph paper, markers)
Reference Books
- “Economics for Senior Secondary Schools” by Adegoke
- Lagos State Scheme of Work for Economics
Content
1. Definition of Supply
- Supply: Supply is the quantity of a good or service that producers are willing and able to sell at a given price over a specified period.
2. Law of Supply
- Law of Supply: The law of supply states that as the price of a good or service increases, the quantity supplied also increases, and as the price decreases, the quantity supplied decreases, ceteris paribus (all other things being equal).
3. Supply Schedule
- Supply Schedule: A supply schedule is a table that shows the relationship between the price of a good and the quantity that suppliers are willing to supply.
- Example Supply Schedule:
| Price (Naira) | Quantity Supplied (units) |
|---|---|
| 10 | 10 |
| 20 | 20 |
| 30 | 30 |
| 40 | 40 |
| 50 | 50 |
4. Supply Curve
- Supply Curve: A supply curve is a graphical representation of a supply schedule, showing the relationship between the price of a good and the quantity supplied.
- Characteristics:
- The supply curve generally slopes upward from left to right, indicating a direct relationship between price and quantity supplied.
5. Determinants of Equilibrium Price
- Equilibrium Price: The equilibrium price is the price at which the quantity demanded by consumers equals the quantity supplied by producers.
- Determinants of Equilibrium Price:
- Supply and Demand: When both supply and demand are equal, equilibrium is achieved.
- Market Adjustments: Shortages or surpluses in the market cause adjustments to reach equilibrium.
- External Factors: Changes in factors like production cost, taxes, and subsidies also influence the equilibrium price.
Presentation Steps
Step 1:
Teacher’s Activities: Define supply and explain the law of supply, giving examples of how producers respond to price changes.
Learners’ Activities: Students will discuss examples of goods they think producers might supply more of when prices increase.
Step 2:
Teacher’s Activities: Introduce the concept of a supply schedule and display an example on the board.
Learners’ Activities: Students will create their own supply schedules using different price points.
Step 3:
Teacher’s Activities: Demonstrate how to plot a supply curve from the supply schedule, explaining the characteristics of an upward-sloping curve.
Learners’ Activities: Students will plot a supply curve on graph paper using the data from their supply schedules.
Step 4:
Teacher’s Activities: Explain equilibrium price and the factors that determine it, discussing how supply and demand influence market prices.
Learners’ Activities: Students will identify factors they think could cause price changes in the market and relate them to equilibrium.
Assessment
- Define supply.
- State the law of supply.
- What is a supply schedule?
- Draw a supply curve based on the following supply schedule:
| Price (Naira) | Quantity Supplied (units) |
|---|---|
| 15 | 15 |
| 25 | 25 |
| 35 | 35 |
| 45 | 45 |
| 55 | 55 |
- Explain how the equilibrium price is determined.
Conclusion
The teacher will summarize the lesson by emphasizing the relationship between supply, demand, and equilibrium price, highlighting how both consumers and producers influence prices in the market.
Meta Description
“Understand supply in Economics SS1! Learn the law of supply, explore supply schedules and curves, and discover the factors that set the equilibrium price in the market.”
Fill-in-the-Blank Questions
- ________ refers to the quantity of a good producers are willing to sell at a certain price.
- The law of ________ states that as price increases, quantity supplied increases.
- A ________ schedule shows the quantity supplied at different prices.
- The ________ curve slopes upward from left to right.
- ________ price is the point where supply equals demand.
- When demand is greater than supply, there is a ________.
- When supply exceeds demand, a ________ occurs.
- Price adjustments continue until the market reaches ________.
- Factors like ________ and subsidies influence the equilibrium price.
- The law of supply has a ________ relationship with price.
- ________ price adjustments lead to equilibrium in a free market.
- The supply schedule is similar to the ________ schedule but for producers.
- When quantity demanded equals quantity supplied, it is called ________.
- A supply curve generally slopes ________.
- Market equilibrium prevents ________ and shortages.
FAQs with Answers
- What is supply in Economics?
Supply is the quantity of a good or service that producers are willing to sell at a given price. - State the law of supply.
The law of supply states that as price increases, the quantity supplied also increases. - What is a supply schedule?
A supply schedule is a table that shows the relationship between price and quantity supplied. - How does a supply curve differ from a demand curve?
A supply curve slopes upward, while a demand curve slopes downward. - What is equilibrium price?
Equilibrium price is the price at which quantity demanded equals quantity supplied. - What happens when demand exceeds supply?
Prices tend to rise to reduce demand or encourage more supply. - What is a surplus in Economics?
A surplus occurs when supply is greater than demand. - How can taxes affect equilibrium price?
Taxes increase production costs, which can raise the equilibrium price. - Why is the supply curve upward sloping?
Because producers are willing to supply more at higher prices. - What factors affect the equilibrium price?
Factors include supply and demand levels, production costs, and market regulations. - What is meant by a shortage?
A shortage happens when demand exceeds supply. - How does market equilibrium prevent shortages and surpluses?
By adjusting prices to balance supply and demand. - Can external factors influence supply?
Yes, factors like weather, government policies, and technology affect supply. - What role does equilibrium play in a free market?
It helps allocate resources efficiently and stabilizes prices. - How are supply and demand schedules used in Economics?
They provide data to create curves and analyze price and quantity relationships.
Evaluation Questions
- Define supply in the context of Economics.
- State the law of supply and provide an example.
- What is a supply schedule, and why is it useful?
- Draw a supply curve based on given supply data.
- Explain the concept of equilibrium price.
- What is a surplus, and how does it affect prices?
- Identify three factors that determine equilibrium price.
- Describe the effect of a shortage on price levels.
- How does market equilibrium adjust in response to demand changes?
- Why is the equilibrium price important in Economics?