DSE Economics | Demand, supply and equilibrium lesson plan (for tutors)

DSE Economics | Demand, supply and equilibrium lesson plan (for tutors) | Why a price ceiling creates a shortage

2026-11-03

Tutor lesson-prep guides · Secondary Economics

Students can draw two lines but answer “because they cross” when asked why price settles there. This lesson starts from the equations so equilibrium becomes a number, then pushes on to ceilings and floors.

Objectives — Students can: (1) solve Qd = 200 – 10P and Qs = 20 + 8P to get price 10 and quantity 100; (2) tell a movement along a curve from a shift of the curve; (3) compute the shortage of 36 units under a ceiling of 8 and the surplus of 36 units under a floor of 12; (4) use elasticity to predict the direction of total revenue.

01 Prerequisites (3-minute check)

If any of these fails, fix it before the lesson starts.

Skill	Quick check	Pass mark
Law of demand	What happens to quantity demanded when price falls?	It rises, other things equal
Simultaneous equations	What does Qd = Qs mean?	The condition for market equilibrium
Total revenue	What is price times quantity?	The seller total revenue TR

02 Lesson flow (60 minutes)

Time	Stage	Tutor does	Student does
0-10 min	Opener	Why are resale concert tickets expensive? Write Qd = 200 – 10P and Qs = 20 + 8P	Guess the price, then check with algebra
10-22 min	Solve equilibrium	Set Qd = Qs, solve for P, substitute back	P = 10, Q = 100
22-34 min	Two kinds of change	Price change means along the curve; income, taste or cost means a shift	Draw each case once
34-45 min	Ceiling and floor	Substitute 8 and 12 into both equations	Shortage 36, surplus 36
45-55 min	Elasticity and revenue	Three points: 1.50, 1.0, 0.67	Revenue 960, 1000, 960
55-60 min	Exit check	Mark on the spot	Three correct

03 Teaching script (read it out)

Scene 1: Equilibrium is an equation, not a feeling

Put both equations side by side: Qd = 200 – 10P and Qs = 20 + 8P. Equilibrium means Qd = Qs, so 180 = 18P and P = 10, giving Q = 100. Above 10 the supply quantity exceeds demand, stock piles up and sellers cut price; below it buyers queue and bid price up. Nobody sets the price; the gap between the two quantities pushes it.

Ask them to: substitute P = 5 and P = 15 and state the market condition at each.

Scene 2: Along the curve versus shift of the curve is where marks are lost

A change in the good own price moves you along the curve: quantity demanded changes, demand does not. A change in income, taste, substitute price or expectations shifts the whole curve. A paper that says “income rises, so the price of rice rises” wants a rightward shift with both price and quantity higher, never a movement up the demand curve. A fall in production cost shifts supply right; it does not raise the quantity supplied along the old curve. Always ask first: did the price change, or something other than the price?

Ask them: vegetables cost more before a typhoon. Movement or shift, and why?

Scene 3: Ceiling and floor: one equation, two outcomes

A ceiling of 8 sits below equilibrium: Qd = 120, Qs = 84, a shortage of 36 units with queues, rationing or black markets. A floor of 12 sits above: Qd = 80, Qs = 116, a surplus of 36 units with unsold stock. Both push the traded quantity below 100, which is the deadweight loss. Full marks need the price, the quantity and who loses; the word “shortage” alone earns little.

Follow up: would a ceiling at 11 still create a shortage? Why?

04 Question types and worked steps

Type	Example	Steps	Answer
Calculation	Equilibrium from two equations	Set Qd = Qs, then substitute	P = 10, Q = 100
Graph	Along the curve or shift	Ask whether the price changed	Price change means along
Policy	Shortage under a ceiling	Substitute the ceiling, subtract	36 units
Elasticity	Revenue effect of a price change	Elasticity first, then P times Q	Cut price when elastic (0.67)

Sanity check (teach this): Check by substituting back: Qd = 200 – 100 = 100 and Qs = 20 + 80 = 100. Consumer surplus is the triangle 0.5 x 100 x (20 – 10) = 500. On a linear demand curve elasticity equals 1 at the midpoint, so revenue peaks at P = 10 (1000) and falls either side, which is the whole story behind “cut price when elastic, raise it when inelastic”.

05 Independent practice (3 questions)

Question	Answer	What to watch
Shortage under a ceiling of 8	36 units	Qd 120 minus Qs 84
Consumer surplus at equilibrium	500	0.5 x 100 x (20 – 10)
Direction when demand shifts right	Both price and quantity rise	Draw the old and new equilibrium

06 Common mistakes and what to say

Mistake	Student writes	Say this
Calling a movement a change in demand	“Price rose, so demand rose”	“A higher price only lowers quantity demanded; the curve never moved.”
Mixing shortage with low supply	“The ceiling cut supply, hence a shortage”	“Supply quantity falls along the curve; the shortage is Qd minus Qs.”
Solving for P and stopping	Answering 10 and moving on	“Substitute back; the quantity is half the answer.”
Judging elasticity from revenue alone	“Revenue rose, so demand is inelastic”	“Revenue rising after a price cut means elasticity above 1.”

07 Homework (paper, section and question numbers)

Economics chapter index — All chapters
Practice paper, Paper 1 Section A — Questions 3 to 6: equilibrium and ceilings

08 Exit check (last 5 minutes)

Question	Answer	Decision
Equilibrium price and quantity	10 and 100	Both right before elasticity
Shortage at a ceiling of 8	36 units	One wrong: redo the substitution
A pre-typhoon price rise	A movement along the supply curve	Two wrong: restart act two

09 Tutor FAQ

Must the equations be memorised?

No, but students must solve two equations for equilibrium within 30 seconds.

Why must a floor create a surplus?

The floor sits above equilibrium, so quantity supplied exceeds quantity demanded.

Are the elasticity numbers worth memorising?

No; remember that elasticity is 1 at the midpoint and revenue peaks there.

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A TutorZone lesson-prep guide. Written by the TutorZone team; questions and lesson flow are original and are not taken from any school or publisher material.