What to explore
Change parameters and watch the model adjust.
- Demand and supply intercepts and slopes
- Demand and supply shifts relative to a baseline market
Intermediate price theory
Supply and Demand Equilibrium
A linear supply-and-demand model with demand and supply shifts, baseline comparisons, and surplus calculations.
Focus
Competitive equilibrium, comparative statics, and surplus
Track how intercepts and shocks shift equilibrium price, quantity, and total surplus in a competitive market.Core ideas
Interpret the mechanics before you chase the graphs.
- Demand and supply shifts can move price and quantity in the same or opposite directions.
- Welfare can be decomposed into consumer surplus, producer surplus, and total surplus.
- Comparative statics become easier to interpret when baseline and current equilibria are shown together.
Learning goals
What this model should help students internalize.
- Solve for equilibrium price and quantity in a linear market.
- Compare baseline and shifted equilibria after demand or supply shocks.
- Interpret how changes in curves affect consumer and producer surplus.
Prerequisites
Concepts to review before diving in.
- Basic graph reading for linear demand and supply
- Comfort with solving two linear equations
Next models to study
Keep moving through the track.
Intermediate price theory
Per-Unit Tax Incidence
See how a per-unit tax alters prices on both sides of the market and divides the burden between buyers and sellers.
Intermediate price theory
Price Ceilings and Price Floors
Switch between ceilings and floors to see when the policy binds, how traded quantity changes, and where welfare losses come from.