📌 Supply and Demand🖊A Level Business - Practice How To Draw Demand And Supply Diagrams - Revision

Summary

This video explains how to draw demand and supply diagrams for economics exams, emphasizing common mistakes students make. It provides practical tips for labeling the axes, drawing demand and supply curves, and marking equilibria points. The video highlights the importance of fully labeling diagrams to earn marks, even if some aspects are incorrect. Additionally, it demonstrates shifts in demand and supply, offers practice questions, and explains key concepts like increases and decreases in both demand and supply. The video also encourages viewers to use related resources and practice regularly.

Takeaways

• 📝 Practice drawing demand and supply diagrams can help students maximize exam marks.
• 🎯 Label the vertical axis as 'Price' and the horizontal axis as 'Quantity' on the diagram.
• 📉 The demand curve is a downward sloping line, while the supply curve slopes upward.
• ✔️ Label the equilibria where supply meets demand with 'P1' (price) and 'Q1' (quantity).
• 🔄 Shifts in the demand curve are labeled as D1, D2, and so on for clarity.
• ⬆️ An increase in demand shifts the demand curve to the right, creating a new equilibrium (P2, Q2).
• ⬇️ A decrease in demand shifts the demand curve to the left, also resulting in a new equilibrium.
• 📐 Always start by drawing an 'X' on the axes to make the diagram clearer and ensure basic marks.
• 🏗️ Government subsidies can increase supply, shifting the supply curve to the right.
• 📊 The video emphasizes labeling diagrams correctly to maximize exam marks, even if shifts are drawn incorrectly.

Q & A

What is the first step in drawing a demand and supply diagram?

The first step is to draw the axes and label the vertical axis as 'price' and the horizontal axis as 'quantity'.

Why do students sometimes lose marks when drawing demand and supply diagrams?

Students may lose marks because they often draw only the demand curve without including the supply curve or labeling the equilibria, which results in an incomplete diagram and a score of zero.

What is the examiner's tip for starting a demand and supply diagram to maximize marks?

The tip is to start with the 'X' by drawing both the demand and supply curves and fully labeling the diagram. Even if the shifts are wrong, labeling the diagram correctly can earn you two marks.

How do you indicate an increase in demand on the diagram?

An increase in demand is shown by drawing a new demand curve to the right of the original curve and labeling it as D2. A new equilibrium is drawn and labeled as Q2 and P2.

What should be labeled on a fully drawn demand and supply diagram?

The axes should be labeled as 'price' and 'quantity', the demand and supply curves should be labeled (e.g., D1, S1), and the equilibrium points should be labeled as P1, Q1, etc., depending on shifts in demand or supply.

How do you show a decrease in demand on the diagram?

A decrease in demand is shown by drawing a new demand curve to the left of the original curve and labeling it as D2. The equilibrium shifts and is labeled as P2 and Q2.

What happens to the demand for sunglasses in the winter, and how would it be reflected on a demand and supply diagram?

The demand for sunglasses in the winter would decrease. This would be reflected by shifting the demand curve to the left and labeling the new curve as D2.

How do you show an increase in supply on the diagram?

An increase in supply is shown by drawing a new supply curve to the right of the original curve and labeling it as S2. The new equilibrium is labeled as P2 and Q2.

What is the effect of a government subsidy on the construction industry, and how would it appear on a diagram?

A government subsidy to the construction industry would lead to an increase in supply. This would be shown by shifting the supply curve to the right and labeling it as S2, with the new equilibrium labeled as P2 and Q2.

Why is it important to label diagrams fully in exam questions?

Labeling diagrams fully is crucial because even if you make errors in drawing the shifts, you can still earn marks for correctly labeling the axes, curves, and equilibria.

Outlines

00:00

🖊️ Introduction to Drawing Demand and Supply Diagrams

This video aims to help students understand how to draw demand and supply diagrams, often a source of confusion. With practice and tips, students can maximize marks in exams. It's recommended to review videos on factors affecting demand and supply to fully grasp diagram shifts. The video includes practice questions, so students should have a pen and ruler ready. The first step is labeling the axes: vertical as 'price' and horizontal as 'quantity.' The demand curve is drawn downward (labeled as D1 when shifted), and the supply curve upward (labeled as S or S1). Equilibrium is labeled as P1 and Q1, representing price and quantity. Even drawing a basic diagram with full labels can earn two marks on an exam. A key tip is to start with an 'X' on the diagram to ensure clarity.

05:01

📉 Showing Shifts in Demand: Increase and Decrease

This section focuses on shifts in demand. In exams, students might need to determine if demand will increase or decrease based on case studies. The video explains how to reflect these changes on a diagram. For an increase in demand, a new demand curve (D2) is drawn along with new equilibrium points (P2 and Q2). A decrease in demand follows a similar process, but the new curve is labeled as D2 to indicate the decrease. It's important to ensure diagrams are labeled correctly to differentiate between the original and shifted curves. Completing the diagrams with proper labeling guarantees full marks, even if the shift is incorrect.

10:03

🕶️ Practice Question: Demand for Sunglasses in Winter

The video introduces a practice question: 'Draw a demand and supply diagram to show the demand for sunglasses in winter.' Since demand decreases in winter, students are advised to reflect this in their diagrams by starting with the 'X' and showing a decrease in demand. After pausing the video to attempt the question, the answer shows a decrease in demand, demonstrated by the shift to D2. The video also promotes a 'cheat sheet' document, containing factors affecting demand and supply, to assist students in their revision.

Keywords

💡Demand curve

The demand curve represents the relationship between the price of a product and the quantity demanded by consumers. In the video, the demand curve is a downward sloping line, showing that as price decreases, demand typically increases. The concept is central to understanding how changes in market conditions affect demand for goods, and shifts in the curve reflect changes like increases or decreases in demand.

💡Supply curve

The supply curve illustrates the relationship between the price of a product and the quantity that producers are willing to supply. The video shows this as an upward sloping line, meaning that as prices increase, the quantity supplied also increases. Shifts in the supply curve, due to factors like government subsidies or cost changes, are essential to understanding market equilibrium.

💡Equilibrium

Equilibrium is the point where the demand and supply curves intersect, representing the price (P1) and quantity (Q1) at which the market clears. In the video, equilibrium is labeled and discussed as the center where supply meets demand, crucial for explaining how prices are determined in a market.

💡Shifts in demand

Shifts in demand refer to changes in the quantity demanded at every price level due to factors like consumer preferences, income changes, or seasonal effects. In the video, shifts are shown as movements from one demand curve (D1) to another (D2), either increasing or decreasing depending on external factors, such as the example of reduced demand for sunglasses in winter.

💡Shifts in supply

Shifts in supply occur when factors other than price influence the quantity of goods producers are willing to supply. The video demonstrates how the supply curve moves to the right (S2) with an increase in supply, such as when a government subsidy supports an industry, and to the left with a decrease in supply.

💡Price

Price, labeled on the vertical axis of the demand-supply diagram, is a critical factor influencing both demand and supply. The video emphasizes the role of price in determining the market equilibrium, where changes in price levels (P1, P2) lead to shifts in the curves and affect quantities demanded or supplied.

💡Quantity

Quantity, labeled on the horizontal axis, represents the number of goods or services that consumers demand or producers supply. In the video, it is used to measure the impact of shifts in demand or supply, where changes in equilibrium affect the quantity bought or sold in the market (Q1, Q2).

💡Increase in demand

An increase in demand means more of a good is desired at every price level, typically caused by factors like rising consumer incomes or favorable trends. The video demonstrates this by shifting the demand curve to the right (D2), showing a new equilibrium with a higher price and quantity.

💡Decrease in demand

A decrease in demand reflects reduced desire for a product at all price levels, often due to factors like seasonality or economic downturns. The video gives the example of lower demand for sunglasses in winter, with the demand curve shifting left and the new equilibrium showing lower prices and quantities.

💡Government subsidy

A government subsidy is financial assistance provided to reduce costs for producers, encouraging increased production. The video discusses a subsidy for the construction industry, which leads to an increase in supply (shift of the supply curve to S2), affecting the market by lowering prices and increasing quantities available.

Highlights

The video focuses on drawing demand and supply diagrams, which students often find challenging but can master with practice.

The first step in drawing a demand and supply diagram is to label the axes correctly: the vertical axis as price and the horizontal axis as quantity.

A complete diagram includes both a demand curve (downward sloping) and a supply curve (upward sloping), which must be fully labeled.

Always label the equilibrium where the demand and supply curves intersect, marking it as P1 for price and Q1 for quantity.

To maximize marks, start drawing the demand and supply diagram by creating an 'X' shape right after labeling the axes.

An increase in demand is shown by shifting the demand curve to the right (D2) and adjusting the equilibrium accordingly (P2 and Q2).

A decrease in demand is reflected by shifting the demand curve to the left (D2) and labeling the new equilibrium points (P2 and Q2).

If you make a mistake with the shift but fully label the diagram, you will still receive partial credit (two marks in a four-mark question).

When drawing shifts in supply, an increase in supply shifts the supply curve to the right (S2) with new equilibrium points (P2 and Q2).

A decrease in supply shifts the supply curve to the left, again requiring proper labeling of the new equilibrium points.

The video recommends using the 'X' shape as a consistent starting point for all demand and supply diagrams to ensure correctness.

A practical example: the demand for sunglasses decreases in winter, which is reflected by a leftward shift of the demand curve.

In questions involving subsidies (e.g., for the construction industry), the supply curve shifts right to show an increase in supply.

Proper labeling and consistency in the diagrams are crucial for scoring full marks in exams, even if there are minor errors in shifts.

The video includes practice questions with fully labeled diagrams to help students understand the application of the concepts.

Transcripts

this video will show you how to draw

demand and supply diagrams

as so many students often find it

challenging and a little confusing

but with practice and the tips i'll give

you you'll be able to maximize marks and

show the examiners what they're looking

for feel free to revisit this video

anytime you need to as well

do ensure you've watched the factors

affecting demand and the factors

affecting supply videos so you have a

good understanding of why shifts occur

on these

diagrams this video will also have

practice questions

so grab your pen and a ruler and let's

practice drawing the diagrams you can

pause the video as we go along if needed

you may have learned to draw the demand

curve like this which is correct it is

not wrong however i've seen as an

examiner when students are asked to draw

a demand and supply diagram this is all

they might draw

which is incomplete

and so they get

zero marks

which is not what you want

so to avoid that i'll show you how to

get full marks when you need to draw a

demand and supply diagram

the first step is to draw the axes

you should label the vertical axis as

price

and the horizontal axis is quantity

the demand curve is a downward sloping

line and we'll label it as d

we'll label it as d1 later when we've

made a shift

and then we draw the supply curve which

is a upward sloping line

and label it as s or s1

so let's continue to label our diagram

we now need to include the equilibria

so it starts on the equilibrium

in the very center where supply meets

demand and then we label that part of

the equilibria as

p1

and we continue

and we label that as q1 so it should be

as you can see it like that

it shouldn't be straight lines

when you're drawing the equilibria

now if you have a format question and if

you just draw this

and label it fully even if you get the

shifts wrong you will get two marks

i often tell my students to just start

off with the x

so draw in the letter x

straight after you have drawn the axes

then draw the letter x

and fully label it and you're good to go

so remember

start off with the x

a little reminder for you

now this part of the video will focus on

demand and shifts in demand whether

there's an increase in demand

or a decrease in demand

now you could be asked in an exam

question

to construct a supply and demand

diagram and within the case study you

will need to ascertain whether there's

going to be an increase in demand

or a decrease in demand now if you're

not sure about the factors that affect

demand

do check out this video i will put the

link to it in the description box

let's take a look at what a shift on the

demand curve would look like

we'll look at an increase in demand and

a decrease in

demand first of all we will look at an

increase in demand

so we started off with the x and we

fully label the axes and we've labeled

the demand curve and the supply curve

and we've drawn our equilibria

now we're going to show a increase in

demand

so we need to draw a new demand curve

there's our new demand curve but we need

to label it so we'll label it as d2

now we need a new equilibria

so we join the equilibria

and then we will label that as q2

and we will continue to draw equilibria

and label this as

p2

so now we have shown an increase in

demand

i hope you've got that down

i hope you've seen that was super

straightforward

just a reminder to please like

share and subscribe

as i do post regularly

now let's show a decrease in demand

so to draw a demand and supply diagram

to reflect a decrease in demand

we start off again by drawing our axes

label them price

and quantity

then we have the demand curve and we

label that as

d

and we have our supply curve and we

label that with an s

so far so good

so now we need to draw our equilibria so

we will do that quickly

label it p1

and then label it q1 so that gives us

two marks if it was a four mark question

and that's what i mean by starting off

with the x fully labeling that

making sure that we have gained some

marks

even if our shift goes incorrectly

so now we're going to

put our shift in and it's a decrease in

demand

you might have noticed that our d has

changed

from d to d1 and that's because we're

making a shift so sometimes it might be

d

and then your new shift might be d2 or

you might change the d to d1 to d2 as

long as you show

that there's difference from your

original demand curve to the new one

they both can't

be

labeled as d for example there's got to

be a difference so i'm labeling this one

as d1 and the new curve i'm going to

label as d2

so let's bring in our new curve we're

showing a decrease in demand

d2

and including our equilibria

and we'll put q2 down

and we will continue

can you guess

yes that's p2

so that would give you four marks out of

a four mark question if you're asked to

draw a demand and supply diagram and

reflect a decrease in demand

it's as simple as that

label your diagrams

wasn't that straightforward

so just to show you an increase in

demand fully labeled diagram there and a

decrease in demand another fully labeled

diagram

let's try a practice question

draw a demand and supply diagram to

reflect the demand for sunglasses

in the winter

do check out this demand and supply

cheat sheet to use for your revision

this document includes all the factors

affecting demand and all the factors

affecting supply with questions

and the fully labeled demand and supply

diagrams as answers

i'll put the link to it in the

description box

okay so back to this question so give it

some thought

and we'll talk through it

i'd like for you to consider what would

happen to the demand for sunglasses in

the winter

the diagram helps us to predict what

will happen in the market when there is

a change

so we need to consider the change and

the change here is that it's no longer

summer it is winter

it's a change in seasons

so what would happen is demand for

sunglasses in the winter would fall

you can attempt this question

now remember to start off with the x

and then show a decrease in demand

you can pause the video and attempt the

question now

alright so here is the answer a decrease

in demand

would look like this

did you get it right

now onto shifts on the supply

curve again we start with the x

so this is what our x would look like as

we know but for this part of the video

we're now focusing on the supply curve

almost there

we'll start off by looking at an

increase in supply so we're only making

changes to the supply curve here

bring in a new supply curve

and we will label it as s2

we can't have it being called s1

s2

and now we need to include our

equilibria

so we do that and we will label it p2

that's price level 2 p2

and continue with our equilibria and

label it q2

quantity 2

and that's it

increase in supply

that's straightforward

so if there's a decrease in supply

and we're asked to draw a diagram

we would start off with the x we do that

with

any demand and supply diagram we start

off with the x it makes it so much

simpler

and you will still get marks for it

so start off with the x and we're

focusing on the supply curve

so we bring in our new supply curve

and we label it as s2

draw our equilibria

p2

and that is q2

and that is a decrease in supply

now you should have drawn a decrease in

supply

before we look at our practice question

let's just look at the two diagrams side

by side so increase in supply looks just

as follows

and a decrease in supply

looks like that

on to our practice question

construct a demand and supply diagram to

show a government subsidy being used to

support the construction industry

we now need to think

is this a factor that would affect

demand so the demand curve for change

or a factor affecting supply

if you're not sure about the factors

then do check out these videos

you need to know the factors

remember to start off with the x

this question gives mention to a subsidy

in the construction industry

in this instance for this question

the impact would be on supply

but you now need to consider where the

supply would increase or decrease so if

a subsidy is being given to the

construction industry there would be an

increase in supply

you can pause the video and attempt to

draw the diagram

and here is the answer

[Music]

you