Cambridge A Level Economics: Demand, supply and market equilibrium (9708) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover sections 2.1 and 2.4 of the Cambridge International AS & A Level Economics 9708 syllabus for examination in 2026, 2027 and 2028. They are AS Level content, assumed knowledge for A Level Papers 3 and 4. All markets and figures are invented, and money is in currency units (cu). Read the study guide and the revision notes first. The course hub and checklist show the rest of the syllabus.

Questions

1. Define effective demand. [2]

2. Three buyers’ demand for a product is shown. Calculate market demand at each price.

Price (cu)	Buyer A	Buyer B	Buyer C
10	8	6	10
20	5	4	6
30	2	1	3

[3]

3. In a market for bicycles, state whether each event moves the market along a curve or moves the curve itself, and give the direction.

(a) Consumers’ incomes rise (bicycles are a normal good). [1] (b) The price of steel, an input, rises. [1] (c) The price of bicycles rises. [1] (d) The government introduces a subsidy for bicycle makers. [1]

4. In a market, Qd = 90 - 3P and Qs = 6P - 18, where P is in cu.

(a) Find the price and quantity at which the market clears. [3] (b) Calculate the excess at a price of 16. [3] (c) Explain how the market moves back towards equilibrium from a price of 16. [3]

5. Continue with the market in question 4.

(a) Incomes rise and demand becomes Qd = 108 - 3P. Calculate the new equilibrium. [3] (b) Input costs then rise and supply becomes Qs = 6P - 36. Calculate the equilibrium with both changes. [3] (c) Compare the result with the original equilibrium and explain why the change in quantity needs the numbers. [2]

6. The price of games consoles falls. Explain the likely effect on the market for console games. [3]

7. Demand for wooden furniture falls. Using derived demand, explain the effect on the market for timber. [4]

8. Lamb meat and wool come from the same sheep. Demand for lamb rises. Explain the effect on the market for wool. [4]

9. A theatre has 400 seats. Demand is Qd = 1200 - 4P.

(a) Calculate the price that sells every seat. [2] (b) A star joins the cast and demand becomes Qd = 1360 - 4P. Calculate the excess demand at the old price. [2] (c) Calculate the new price that clears the market. [1] (d) Explain the rationing, signalling and incentivising functions of price in this case. [3]

10. A private clinic offers 60 appointments a week. Evaluate whether price is a fair way to ration them. [8]

11. Four markets show these changes. In each, assume only one curve shifted. State which curve shifted and in which direction.

Market	Price	Quantity
(a)	rises	rises
(b)	falls	rises
(c)	rises	falls
(d)	falls	falls

[4]

Answers

1. Willingness to buy a good at a given price [1], backed by the ability to pay, meaning purchasing power [1]. [2] Examiner insight: A definition needs both parts. A wish without money behind it is a want, so name the ability to pay.

2. Add across the buyers at each price. At 10: 8 + 6 + 10 = 24 [1]. At 20: 5 + 4 + 6 = 15 [1]. At 30: 2 + 1 + 3 = 6 [1]. [3] Examiner insight: Show the addition for each price. A table of three totals with no working gives the reader nothing to credit if one figure slips.

3. (a) Demand shifts right [1]. (b) Supply shifts left [1]. (c) Movement along the curves: quantity demanded contracts and quantity supplied extends [1]. (d) Supply shifts right [1]. [4] Examiner insight: For a price change write “movement along”, not “shift”. The direction word matters as much as the choice of curve.

4. (a) Set 90 - 3P = 6P - 18 [1]. So 108 = 9P, giving P = 12 [1]. Q = 90 - 36 = 54 [1]. (b) At 16, Qd = 90 - 48 = 42 [1] and Qs = 96 - 18 = 78 [1]. Excess supply = 78 - 42 = 36 [1]. (c) Sellers cannot sell all their stock at 16 and unsold goods build up [1]. Sellers cut price [1]. The falling price extends quantity demanded and contracts quantity supplied, until both equal 54 at a price of 12 [1]. [9] Examiner insight: In part (c) a chain is needed: the surplus leads to a price cut and the price cut changes both quantities. Naming the surplus alone is only the start.

5. (a) Set 108 - 3P = 6P - 18 [1]. So 126 = 9P, giving P = 14 [1]. Q = 108 - 42 = 66 [1]. (b) Set 108 - 3P = 6P - 36 [1]. So 144 = 9P, giving P = 16 [1]. Q = 108 - 48 = 60 [1]. (c) Price rises from 12 to 16 and quantity rises from 54 to 60 [1]. Demand raises quantity and supply lowers it, so the net effect on quantity depends on the size of each shift [1]. [8] Examiner insight: When two curves shift, one effect is certain and the other is not. Say which, and tie it to the numbers.

6. Console and game are complements in joint demand. The fall in console price extends quantity demanded of consoles [1]. More consoles in use means demand for games shifts right [1]. Equilibrium price and quantity of games both rise [1]. [3] Examiner insight: Show the link in order: price of console, quantity of console, demand for games. A bare statement that demand rises misses the reasoning.

7. Timber is demanded because it is used to make furniture, so its demand is derived [1]. Less furniture is produced [1], so demand for timber shifts left [1]. Equilibrium price and quantity of timber fall [1]. [4] Examiner insight: Name the product whose demand has changed first. Derived demand answers go wrong when the shift is drawn in the furniture market instead of timber.

8. Lamb and wool are in joint supply [1]. Higher demand for lamb raises the number of sheep reared [1], so supply of wool shifts right [1]. Price of wool falls and quantity rises [1]. [4] Examiner insight: The cause is demand in one market, the effect is supply in the other. Do not draw a demand shift in the wool market.

9. (a) Set 1200 - 4P = 400 [1], so P = 200 [1]. (b) At 200, new Qd = 1360 - 800 = 560 [1]. Excess demand = 560 - 400 = 160 [1]. (c) 1360 - 4P = 400 gives P = 240 [1]. (d) Rationing: the higher price removes the 160 buyers with least willingness or ability to pay [1]. Signalling: the rise shows the show is popular, so the theatre knows demand has risen [1]. Incentivising: higher revenue encourages more performances in future [1]. [8] Examiner insight: Apply each function to the theatre. A definition of rationing on its own is not enough for a context question.

10. Price allocates appointments to those with effective demand, those willing and able to pay [1]. It is efficient in one sense because appointments go to those who value them most in money terms [1]. A higher price signals scarcity and gives the clinic an incentive to offer more appointments [2]. It may be unfair because willingness to pay depends on income, so patients with greater medical need but lower income may be excluded [2]. Rationing by queue or by need may be fairer, and fairness is a value judgement [1]. Judgement: price is fair only if you accept ability to pay as the test, which is weaker for health care than for goods like bicycles [1]. [8] Examiner insight: A strong answer weighs the argument and reaches a supported view. A list of advantages and drawbacks with no judgement usually leaves evaluation marks unearned.

11. (a) Demand shifts right [1]. (b) Supply shifts right [1]. (c) Supply shifts left [1]. (d) Demand shifts left [1]. [4] Examiner insight: Same direction for price and quantity points to demand; opposite directions point to supply. State the one-curve assumption in your answer.

Where marks are usually lost

• Calling a purely price-driven change a rise in demand.
• Giving only the ability to pay, or only the willingness, in a definition of effective demand.
• Adding prices rather than quantities when building a market curve.
• Not showing the algebra when finding an equilibrium.
• Naming a surplus or shortage without saying how price then changes.
• Putting a derived demand or joint supply shift in the wrong market.
• Listing the functions of price without applying them to the context.
• Ending an evaluation without a judgement.

Next steps

• Review the revision notes and the study guide.
• Visit the Cambridge A Level Economics hub and tick off the checklist.
• Take one of the free 10-minute diagnostics.
• Want a teacher to go through your answers? Book a free trial class.

Official syllabus

Cambridge International AS & A Level Economics 9708 syllabus for examination in 2026, 2027 and 2028, published by Cambridge University Press & Assessment, sections 2.1 and 2.4.