Model overview
Supply and Demand
How competitive markets set prices and quantities — equilibrium, shifts of the curves, consumer and producer surplus, and what price ceilings and floors do to all of it.
Navigate the learning sections below, then move into the interactive model once you want to experiment with parameters.
Introduction
Why prices are what they are, what the supply-and-demand model answers, and the two equations that underpin the whole page.
The Demand Curve
The law of demand, the demand schedule, the demand curve, and what shifts it.
The Supply Curve
Why supply curves slope upward, what moves you along one versus what shifts the whole curve, and how the linear supply equation captures both effects.
Market Equilibrium
The equilibrium price is the one at which the quantity buyers want exactly equals the quantity sellers offer. Setting quantity demanded equal to quantity supplied — and solving for price — is the whole method.
Shifts and Comparative Statics
How outside forces move the demand and supply curves, how the equilibrium responds, and the double-shift trap that catches students on free-response questions.
Consumer and Producer Surplus
How markets create measurable value for buyers and sellers, and why that value is maximized at the competitive equilibrium.
Price Ceilings and Price Floors
How legal price limits — ceilings and floors — create shortages, surpluses, and deadweight loss, with worked numbers and a live exploration.