P05 · Lesson 2 of 10 · 12 min · 4 hands-on tasks
Supply and Demand
Prices aren't set by sellers or buyers alone: they land where the two meet. Shift demand and supply yourself and watch prices, shortages and queues appear.
🎬 Situation
Some of Jada's shows sell out in minutes, then tickets reappear online at three times the price. Others play to half-empty rooms.
Same venue, same city. The difference is where her price sits compared with what economists call the equilibrium.
🎮 Play
Move the market. The chart shows how many gig tickets buyers want and venues offer at each price. Shift demand (how much people want to go out) and supply (how many shows and venues there are).
Right at equilibrium: every ticket offered finds a buyer.
Hold the price down. What happens if the price is capped below where the curves cross?
Below the $25 market price: a shortage. Fewer tickets are sold than at $25, not more.
🏷️ Name it
| Term | Meaning |
|---|---|
| Demand | How much buyers want at each price (falls as price rises) |
| Supply | How much sellers offer at each price (rises as price rises) |
| Equilibrium | The price where quantity demanded = quantity supplied |
| Shortage | Price below equilibrium: more wanted than offered |
| Surplus | Price above equilibrium: more offered than wanted |
| Shift | A change in something other than price moves the whole curve |
| Event | Shifts | Price | Quantity |
|---|---|---|---|
| A famous band comes to town | Demand ↑ | ↑ | ↑ |
| Recession: people go out less | Demand ↓ | ↓ | ↓ |
| A new venue opens | Supply ↑ | ↓ | ↑ |
| Venues' costs rise (energy, wages) | Supply ↓ | ↑ | ↓ |
🖍️ Like you're five: if everyone at school wants the shiny new stickers and there are only a few, kids trade lots of sweets for one. If everyone has loads of them, nobody gives much for one. The "price" of a sticker depends on how many there are and how many kids want them.
Real life: concert tickets are the textbook case: when prices are set below what fans would pay, resale markets appear and capture the difference. Ride-hailing apps raise prices when demand spikes, airlines when seats fill up, and hotels during big events. All of them are moving prices toward where demand meets supply.
🔨 Do it: 4 tasks
0 / 4 doneTask 1 of 4 · Find the market price
Friday-night gig tickets in Jada's city: buyers want 1,200 − 20 × price tickets; venues offer 200 + 20 × price tickets.
At what price do the two match?
Task 2 of 4 · A shortage
The city caps gig tickets at $15. How many more tickets do people want than venues offer? (Wanted: 1,200 − 20 × 15. Offered: 200 + 20 × 15.)
Task 3 of 4 · A surplus
Venues all charge $35. How many tickets go unsold?
Task 4 of 4 · Which way does it move?
A famous band announces a surprise tour stop in town. What happens in the gig-ticket market that week?
🧩 Case: The sell-out problem
⭐ VIPThe Loft's shows keep selling out in minutes at $30, and tickets reappear online at $90. Fans are angry, and the resellers make more from Jada's shows than she does.
What is the market telling Jada?
What would you do? VIP members make the call, see what happens next across 2 decisions, and get the expert debrief.
🔁 Remember it
If the price is below equilibrium, you'll see...
A new 1,000-person venue opens in town. In the gig-ticket market...
A change in price causes...
Demand falls as price rises; supply rises as price rises. The market price settles where they cross (equilibrium). More demand pushes price and quantity up; more supply pushes price down. A price held below equilibrium causes shortages; above it, unsold surpluses.
📅 Use it Monday
Look for one thing your company sells that sells out, or one that piles up unsold. Is the price above or below where demand meets supply?
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