01Model
Build the economic model
Demand reflects willingness and ability to buy; supply reflects willingness and ability to sell. Equilibrium coordinates plans where quantity demanded equals quantity supplied.
For demand, supply and equilibrium, state the relationship between demand and the relevant agents, then identify the ceteris-paribus conditions. The model is a disciplined simplification, not a complete description of reality.
- Define the central variables precisely.
- Identify the agents making decisions.
- State what is held constant and why that matters.
02Evidence
Apply evidence and data
A Northern Ireland heat-pump market experiences a grant increase while installer wage costs rise.
Application in demand, supply and equilibrium means using scale, direction, timing and source to alter the argument. Explain how the evidence changes the mechanism instead of merely naming the context or copying a figure.
- Check units, dates and whether values are nominal or real.
- Separate correlation from a supported causal inference.
- Identify winners, losers and the appropriate counterfactual.
03Analyse
Develop the mechanism
Non-price determinant changes → demand or supply curve shifts → shortage or surplus at the old price → price and quantity adjust toward a new equilibrium.
Carry this demand, supply and equilibrium chain far enough to answer the question: identify the agent's response, the resulting market or macroeconomic change and why the outcome matters.
- Explain each arrow in the chain.
- Use the diagram or calculation in the written analysis.
- Distinguish short-run adjustment from longer-run response.
04Evaluate
Evaluate assumptions and magnitude
The size and speed of adjustment depend on elasticity, information, spare capacity and whether other determinants change simultaneously.
Evaluation of demand, supply and equilibrium should change confidence in the result. Test elasticity, time lags, scale, incentives, distribution and unintended effects rather than adding a generic “however”.
- Which assumption is most fragile?
- Would a different elasticity reverse or only weaken the result?
- What evidence could change the judgement?
05Judge
Reach an informed judgement
For demand, supply and equilibrium, choose the argument with the greatest contextual importance and explain why it outweighs the alternative. State the conditions under which it holds rather than repeating the introduction.
The opportunity cost and distributional effect of demand matter. Political preferences may affect objectives, but the exam judgement must rest on transparent assumptions and evidence rather than ideology.
- Answer the exact command and scope.
- Rank the decisive factors.
- State a condition, timeframe and possible reason to revise the conclusion.
From theory to a testable claim
Demand reflects willingness and ability to buy; supply reflects willingness and ability to sell. Equilibrium coordinates plans where quantity demanded equals quantity supplied.
Applied taskA Northern Ireland heat-pump market experiences a grant increase while installer wage costs rise.
Causal chain
Non-price determinant changes → demand or supply curve shifts → shortage or surplus at the old price → price and quantity adjust toward a new equilibrium.
Applied taskRewrite the demand, supply and equilibrium chain with one piece of numerical or contextual evidence at the link where it changes the expected magnitude.
Evaluation that does work
The size and speed of adjustment depend on elasticity, information, spare capacity and whether other determinants change simultaneously.
Applied taskExplain whether this consideration weakens, delays, redistributes or reverses the predicted demand, supply and equilibrium outcome.