Shortage, Surplus, and Equilibrium Worksheet with Answers

This shortage and surplus worksheet asks students to calculate a market imbalance, explain the pressure on price, and distinguish price adjustment from a curve shift. It includes an original supply-and-demand schedule, five student tasks, a new-demand extension, and a worked teacher key. Use it after students can read both curves and before adding price controls.

Teacher setup

Allow about 25 minutes: five for the schedule, seven for the graph, eight for the adjustment explanations and extension, and five for checking answers. Students need paper, a pencil, and optionally a calculator. The activity does not require a device or account. Copy the student section into a handout or LMS; the answers are visible farther down this page.

The invented market is bottles of water at a weekend sports event. Quantities are bottles per hour, and price is dollars per bottle. Assume a competitive market, flexible prices, no government purchases, and unchanged supply and demand unless a task explicitly introduces a shift. Students are analyzing desired purchases and offers at each price, not a record of completed transactions. The table is a model for practicing reasoning, not observed sales data.

Student worksheet

A. Complete the market table

1. Complete the two blank columns. Subtract the smaller quantity from the larger, but also identify which side is larger.

2. Identify equilibrium price and quantity. Explain what is equal there.

B. Build the graph

Draw price on the vertical axis and bottles per hour on the horizontal axis. Plot the demand and supply schedules as two lines and label their intersection E1. Draw a horizontal line at $2. Label the quantity supplied and quantity demanded at that price. Show the shortage as a horizontal distance, not a vertical price difference. Repeat at $6 for the surplus.

C. Explain adjustment without shifting a curve

The market begins at $2. In one paragraph, explain the pressure on price and what happens to quantity demanded and quantity supplied as price approaches equilibrium. State explicitly whether either curve must shift.

Then repeat for a starting price of $6. Your explanation must use the words quantity demanded and quantity supplied, not just demand and supply.

D. A new group of buyers arrives

Now suppose a larger crowd increases quantity demanded by 40 bottles per hour at every listed price. Supply is unchanged.

1. Write the new demand schedule.

2. At the old equilibrium price of $4, calculate the new imbalance.

3. Find the new equilibrium price and quantity from the schedules.

4. Sketch the new demand curve D2 beside D1. Label E2. Explain why the new equilibrium price and quantity are both higher, but the supply curve has not shifted.

E. Catch the error

A student writes: 'At $6, demand is 40 and supply is 120, so producers sell 120 bottles. The surplus will shift demand right until it disappears.' Identify at least two problems and rewrite the claim.

Teacher answer key

Completed table

Initial equilibrium is $4 per bottle and 80 bottles per hour. Quantity demanded equals quantity supplied, not price equals quantity. For an algebra check, the schedules satisfy Qd = 160 - 20P and Qs = 20P. Setting 160 - 20P = 20P gives P = 4, then Q = 80.

Graph: With coordinates written as (quantity, price), E1 is (80, 4). At $2, supply is at (40, 2) and demand at (120, 2), a horizontal gap of 80. At $6, demand is at (40, 6) and supply at (120, 6), again a horizontal gap of 80. These gaps are quantities, not dollars.

Adjustment from $2: Buyers want more bottles than sellers offer, creating upward pressure on price. As price rises toward $4, quantity demanded falls from 120 toward 80 and quantity supplied rises from 40 toward 80. Both are movements along existing curves. No shift is required.

Adjustment from $6: Sellers offer more bottles than buyers want, creating downward pressure on price. As price falls toward $4, quantity demanded rises from 40 toward 80 and quantity supplied falls from 120 toward 80. Again, neither curve shifts. This is a prediction of the flexible-price model, not a promise that a real market adjusts instantly.

New-demand extension

The new quantities demanded at prices $1 through $7 are 180, 160, 140, 120, 100, 80, and 60. At the old price of $4, the new shortage is 120 - 80 = 40 bottles per hour.

New demand is Qd2 = 200 - 20P. Equating it with Qs = 20P gives 200 = 40P, so P = $5 and Q = 100 bottles per hour. E2 is (100, 5). Relative to E1, price rises by $1 and equilibrium quantity by 20 bottles per hour. The 40-unit horizontal demand shift is not the same as the 20-unit increase in equilibrium quantity. The higher price limits the increase in purchases along the new demand curve and increases quantity supplied along the unchanged supply curve.

Error correction: Use quantity demanded and quantity supplied for the amounts at one price; demand and supply name the full relationships. At $6, 120 is quantity offered, not proof that 120 bottles are sold. Buyers want only 40 at that price. In the simple model, assuming willing trades can be matched and no outside purchaser intervenes, at most 40 bottles per hour trade at $6. The surplus is 80 bottles per hour. It puts downward pressure on price; the price change raises quantity demanded along the existing demand curve rather than shifting demand.

Follow-up and support

If students reverse shortage and surplus, ask who leaves the market disappointed at the posted price: buyers who cannot buy, or sellers who cannot sell. If they get the gap right but call it a demand shift, have them trace a finger along the original curve while changing only price. For the extension, compare D1 and D2 at one unchanged price before locating the new crossing.

Use the market equilibrium guide for a worked introduction, the shortage and surplus explanation for vocabulary review, and the supply and demand sandbox to illustrate a demand shift. The sandbox uses its own starting values; it is a conceptual follow-up, not the numerical answer key to this worksheet.

See it move

Make it move

Supply and demand at equilibrium, drawn by the interactive graph. Tap it to drag the curves, open the full version, or put it on your own site free, or turn it into a five-minute class activity.

Concept reference

The schedules, tasks, and answer key are original to this worksheet. The underlying equilibrium and adjustment model is checked against OpenStax, section 3.1, Demand, Supply, and Equilibrium.