Micro

Dynamics of markets

Demand and supply meet at an equilibrium price and quantity, a shortage pushes price up, and a surplus pushes price down.

CAPS

Grade 10 · Economics · Micro

Economics wants the concept, then the diagram or the data, then the consequence.

  • The papers

    Paper 1 is macroeconomics and economic pursuits. Paper 2 is microeconomics and contemporary economic issues. Each paper is 150 marks.

  • How to write it

    Define the term as CAPS uses it. If a graph is asked for, label both axes, the curves, and the equilibrium or the shift. Then say what happens to price, quantity, growth, inflation or unemployment. A curve with no labels does not explain.

  • How a marker reads it

    A common mix-up is saying a higher price causes a shortage, when a shortage is what appears if price stays too low after supply has fallen.

Essays are marked on the introduction, a body that applies the theory, and a conclusion that answers the question. A list of definitions is not an argument.

Worked theory

Worked theory. Tomatoes usually sell at the Johannesburg fresh produce market for about R10 a kilogram, where crates arriving match what buyers take. A hailstorm in Limpopo destroys a large part of the crop, so fewer crates arrive. At R10 a kilogram buyers still want the old amount and there is a shortage. The price on the floor rises to about R18 a kilogram until the smaller supply matches what buyers will still take. That higher price is the new equilibrium after supply fell. The hail did not create a surplus.

More worked examples

  • Tzaneen mango bags

    A heavy season dumps extra mangoes on a Tzaneen roadside. Sellers ask R15 a bag and by afternoon the bags are still piled up. That pile is a surplus, because quantity supplied is above quantity demanded at R15. They drop the bag to R8 and the fruit clears. The lower price is how a surplus moves back toward equilibrium.

  • Diepsloot potato week

    A spaza in Diepsloot usually receives 30 bags of potatoes and sells them at R40. One week only 10 bags arrive. At R40 they are gone by Tuesday and people are still asking, which is a shortage. The price moves to about R70 and fewer households still take a bag. The higher price rations the smaller supply and does not bring the missing bags back onto the shelf.

In ordinary words

Demand is how much buyers want at each price, and supply is how much sellers offer at each price. Equilibrium is where quantity demanded equals quantity supplied. Below that price, buyers want more than is offered and the shortage bids the price up. Above that price, unsold stock is a surplus and sellers cut the price to clear it, while a shock that cuts supply moves equilibrium to a higher price and a smaller quantity.

In South Africa

On the Johannesburg market floor one morning, the usual Limpopo tomato crates are missing.

Part 1 / 4

What it is

Demand and supply meet at an equilibrium price and quantity, a shortage pushes price up, and a surplus pushes price down.

More worked examples

Board walkthroughs on this topic. Open one, copy the working, then try the next.

Example 1 / 20

Qd = 100 − 2P and Qs = 20 + 2P. Calculate the equilibrium price and quantity.

4. Step-by-step working

  1. 01

    Equate

    100−2P=20+2P→80=4P→P=20.

  2. 02

    Substitute

    Q=100−40=60.

How we got there

Read this like a teacher at the board. We go slowly, name every number, and say why we take each step.

Explain in another language · 11

1. What is the question asking?

Read the question twice. Circle the unknown. Underline every number and unit. The paper is asking: Qd = 100 − 2P and Qs = 20 + 2P. Calculate the equilibrium price and quantity.

Before any working — hunt first

Given

Numbers and units already in the sentence: 100 · 2P · 20 · 2P. Copy each one into a column. A name without a number is not given.

Missing

After you copy the given, the letter that still has no number is missing. The paper is pointing at: the equilibrium price and quantity. Circle that word — that is the missing variable.

Find

We are required to find: the equilibrium price and quantity. Write that as a symbol on the left, with a question mark, before you touch a formula.

Calculate

What we need to calculate: Set Qd = Qs. Then substitute the given, one line at a time, to get the equilibrium price and quantity.

In other words — as if you have never seen this before

If you have never seen this before: Set Qd = Qs. We will name a method in words, write the formula with no numbers, then substitute one line at a time.

2. What do we already know?

Demand and supply equations.

3. Which method — and why this one?

Set Qd=Qs.

4. Step-by-step working

  1. 01 / 05

    Equate

    100−2P=20+2P→80=4P→P=20.

    Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.

  2. 02 / 05

    Substitute

    Q=100−40=60.

    Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.

  3. 03 / 05

    Step G — Sense-check the size

    Ask: is this the kind of number a Grade 10–12 paper would want? A speed of 3 000 ms for a learner walking, or a probability bigger than 1, means a unit or algebra slip. Estimate first: round the numbers and do the sum in your head.

    Why this step: Markers write ‘unrealistic’ in the margin when the method is right but the size is wild. A 10-second head check often finds a missing 10² or a unit that never changed.

  4. 04 / 05

    Step F — Box the answer with its unit

    P=R20; Q=60 units.

    Why this step: A number without a unit is half a mark on a Physics paper, and a marker can miss a Maths answer that is buried in working.

  5. 05 / 05

    Step H — What the marker is looking for

    On an NSC memo you usually earn: (1) a method mark for naming the right formula or idea in words, (2) an accuracy mark for substituting the given numbers with units, (3) an accuracy mark for the boxed answer with its unit. Write those three lines even if you are unsure of the arithmetic — blank pages score zero.

    Why this step: First-timers chase the final number and leave the method blank. The memo still pays out for the idea and the substitution even when the last line is wrong.

5. The answer

P=R20; Q=60 units.

Copy onto your answer sheet — in this order

Answer: P=R20; Q=60 units.

6. Check it like a marker

Qs=20+40=60 ✓

7. A trap first-timers fall into

First-timers often grab the first formula they remember, mix units (cm with m, minutes with seconds), or drop a minus sign. Write the formula in words first: “this equals that, because…”

Ntsako · fx-991ZA PLUS. Tap to calculate.