Supply and Demand graph mistakes

20 ways students lose points on this diagram, each taken from a worked free-response scenario. Every entry names the reasoning that causes the error, not just the error, because the wrong answer is usually a sensible thought applied to the wrong curve.

1. 01

   Incomes and Restaurant Meals

   The mistake. Many students shift supply right as well, because more meals end up being served after the change. That extra output is an increase in quantity supplied along an unchanged supply curve, pulled out by the higher price; nothing happened to restaurants' costs, technology, or number.

   Draw this instead. Demand shifts right.

   Exam tip. When only buyers' circumstances change, move exactly one curve and let the other side of the market slide along its own curve; label the new curve D2 and mark the new P and Q with arrows.

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2. 02

   Health Study on Soda

   The mistake. A common wrong answer shifts supply left too, reasoning that bottlers will produce less soda after the study. They do sell less, but only because the price fell; that is a movement down along an unchanged supply curve, since no input price, tax, or technology changed for producers.

   Draw this instead. Demand shifts left.

   Exam tip. Tastes and preferences always land on demand: if the news is about how buyers feel about the product, check that no supply determinant appears anywhere in the stem before you draw.

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3. 03

   Solar Panel Breakthrough

   The mistake. Students very often shift demand right as well, saying that cheaper panels make people buy more. A fall in the good's own price never shifts its demand curve; it produces an increase in quantity demanded, a slide down the existing demand curve to the new intersection.

   Draw this instead. Supply shifts right.

   Exam tip. Write the phrase "increase in quantity demanded" on your answer whenever the good's own price changes; reserve the words "increase in demand" for income, tastes, related-good prices, expectations, and the number of buyers.

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4. 04

   Wheat Price Shock

   The mistake. Students frequently shift demand left as well, because bread gets more expensive and shoppers buy less of it. The higher bread price is the result of the supply shift, not a separate cause, so buyers simply move up along an unchanged demand curve.

   Draw this instead. Supply shifts left.

   Exam tip. Check which market the question actually asks you to graph: the drought hits wheat, but the axes say bread, so wheat can only enter as a cost of production on the supply side.

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5. 05

   Coffee and Tea

   The mistake. The words "poor harvest" trigger many students to shift the supply of tea left. The failed harvest was a coffee harvest; tea growing conditions, tea input costs, and the number of tea sellers are all untouched, so nothing moves tea's supply curve.

   Draw this instead. Demand shifts right.

   Exam tip. Underline the market named in the final sentence before drawing anything; a shock to a substitute reaches your graph only through buyers, so it moves demand, never supply.

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6. 06

   Excise Tax on Cigarettes

   The mistake. Because smokers end up paying more, many students draw this as a leftward demand shift. The tax is legally collected from sellers, so it raises their per-unit cost and moves supply; the higher consumer price is the consequence of that shift, and buyers only move along their unchanged demand curve.

   Draw this instead. Supply shifts left.

   Exam tip. Ask who legally writes the check to the government: a per-unit tax on producers shifts supply up by the tax, while a tax collected from buyers is the one drawn as a demand shift.

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7. 07

   Subsidy to Corn Growers

   The mistake. Students often shift demand right, reasoning that government money entering the market means more buying. The payment goes to growers per bushel produced, so it changes sellers' costs only; household incomes and tastes for corn are untouched, so demand cannot move.

   Draw this instead. Supply shifts right.

   Exam tip. Draw a per-unit subsidy as the exact mirror of a per-unit tax: the same curve moves, in the opposite direction, by a vertical distance equal to the subsidy per unit.

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8. 08

   Console Price and Games

   The mistake. The phrase "chip shortage" leads many students to shift the supply of discs left. Chips are an input to consoles, not to discs, so disc production costs are unchanged and the disc supply curve stays exactly where it is.

   Draw this instead. Demand shifts left.

   Exam tip. For complements, write the chain out before drawing: pricier consoles, fewer consoles bought, fewer discs wanted, so the shift lands on the demand side of the disc graph.

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9. 09

   Recession and Instant Noodles

   The mistake. The reflex answer is to shift demand left because incomes fell, which is the correct rule for a normal good and the wrong one here. For an inferior good, falling income raises demand at every price, so the curve shifts right.

   Draw this instead. Demand shifts right.

   Exam tip. Circle the words "inferior good" and flip the income rule before your pencil touches the graph; a recession stem is only a trap if you skip that one step.

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10. 10

    New Food Trucks Enter

    The mistake. Some students shift supply left instead, thinking that more trucks competing means each one sells less. The graph is the whole market, not one truck: adding sellers raises the total quantity offered at every price, so market supply moves right.

    Draw this instead. Supply shifts right.

    Exam tip. Entry and exit of firms is a supply determinant, so count sellers rather than sales; once supply moves, the resulting price change simply slides buyers along a fixed demand curve.

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11. 11

    Waiting for Cheaper Heat

    The mistake. Many students shift demand right, reading "cheaper oil" as a reason to buy more. The cheap oil arrives next month, and the only way households can act on that today is by waiting, which reduces what they want to buy at every current price and pulls this month's demand left.

    Draw this instead. Demand shifts left.

    Exam tip. Expected future price and current demand move in the same direction: buyers expecting a higher price later rush in now, buyers expecting a lower one hold off, so the demand curve moves the way buyers expect the price to go.

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12. 12

    Copper in the Warehouse

    The mistake. Students commonly shift supply right, reasoning that a higher expected price rewards producing more. The profitable sale is still months away, so what firms change today is not how much they mine but how much they release: metal goes into the warehouse instead of onto this month's market, which is a leftward shift of current supply.

    Draw this instead. Supply shifts left.

    Exam tip. When a stem turns on what sellers expect prices to do later, ask what they can actually do in the market you are graphing right now; storage is what lets an expected future price move today's supply, and it moves it the opposite way.

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13. 13

    New Campus in Town

    The mistake. A frequent error is to shift supply right as well, since more apartments end up occupied after the campus opens. Those extra occupied units are an increase in quantity supplied drawn out by the higher rent, a movement along a fixed supply curve, because no new buildings were added and landlords' costs did not change.

    Draw this instead. Demand shifts right.

    Exam tip. The number of buyers is a demand determinant even in housing questions: shift D right, then read the higher rent and the larger quantity rented off the new intersection instead of touching S.

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14. 14

    Streaming Gets Cheaper

    The mistake. The usual wrong answer shifts the supply of tickets left because theaters end up selling fewer of them. That smaller quantity is a movement down along an unchanged supply curve, caused by the lower ticket price; nothing changed what it costs a theater to run a screening.

    Draw this instead. Demand shifts left.

    Exam tip. For substitutes, demand in the market you are graphing moves in the same direction as the substitute's price, so a cheaper substitute pulls your demand curve left and a pricier one pulls it right.

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15. 15

    Cotton Tempts the Farmers

    The mistake. Because cotton and soybeans are both crops, students often treat them as substitutes in consumption and shift soybean demand right, the way they would for coffee and tea. Households do not choose between soybeans and cotton at the store; the two goods compete for the farmers' acreage, so the change belongs on the supply side.

    Draw this instead. Supply shifts left.

    Exam tip. Ask whether the related good competes for buyers' dollars or for producers' resources: a rival crop grown on the same land shifts supply, a rival item in the shopping cart shifts demand.

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16. 16

    Cheap Jet Fuel

    The mistake. Most students who miss this shift demand right as well, because more people fly once fares drop. Those extra passengers are an increase in quantity demanded along a fixed demand curve, pulled out by the lower fare; nothing changed travelers' incomes, tastes, or the price of any substitute.

    Draw this instead. Supply shifts right.

    Exam tip. Trace the shock to whoever actually pays the bill: airlines buy the fuel, so a cheaper input enters through supply, and the lower fare that follows moves passengers along their own demand curve.

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17. 17

    Tax Cut and Battery Costs

    The mistake. The dominant error is answering as though both outcomes are determinate, usually "quantity rises and price falls," because cheaper batteries feel like the bigger story. Nothing in the stem says which shift is larger, so any price prediction is unsupported; a rubric awards the point only for stating that quantity increases and that the price change cannot be determined without knowing the relative magnitudes.

    Draw this instead. Demand shifts right and Supply shifts right.

    Exam tip. Take a two-shift question one outcome variable at a time: the variable both shifts push the same way is the one you commit to, and for the other write the word "indeterminate" followed by "depends on the relative sizes of the two shifts," which is the phrase the rubric is looking for.

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18. 18

    Gravel Lawns and Steel Prices

    The mistake. Almost every wrong answer here commits to both outcomes, declaring that price rises because steel got expensive, or that price falls because the buyers disappeared, and quietly demoting the other event to background detail. Both curves moved left, so their effects on price offset by an unknown amount and only quantity has a determinate direction; a smaller but real second error is claiming quantity is the indeterminate one, when quantity is the single thing this scenario does pin down.

    Draw this instead. Demand shifts left and Supply shifts left.

    Exam tip. When both curves shift the same direction, the variable they both push (quantity here) is always the determinate one and the other never is, so do not let the more dramatic-sounding of the two events decide the price for you.

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19. 19

    Housing Grants and Wildfires

    The mistake. Two errors show up here. The smaller one is reading the word "grant" as a producer subsidy and shifting supply right, when the money goes to homebuilders, who are buying lumber, so it lands on the demand side. The costly one is announcing that price rises and quantity rises: the demand shift adds to quantity while the supply shift subtracts from it, and since the stem never says which is bigger, quantity has no determinate direction at all.

    Draw this instead. Demand shifts right and Supply shifts left.

    Exam tip. When the two curves shift in opposite directions, price is the determinate outcome, so state the price direction first and then write that quantity could rise, fall, or stay the same depending on the relative sizes of the two shifts.

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20. 20

    Fuel Prices Meet Automation

    The mistake. The standard wrong answer is "price falls and quantity rises," copied straight from the one-shift technology question students have drilled a dozen times. Here the demand shift is subtracting from quantity at the same moment the supply shift is adding to it, and because the stem never ranks the two shifts, quantity has no determinate direction. A second frequent error is shifting supply left because expensive gasoline sounds like a cost of production; the fuel is bought by drivers, not by the carmakers, so it reaches this graph only through buyers.

    Draw this instead. Demand shifts left and Supply shifts right.

    Exam tip. Before writing a single sentence, ask which one variable both events push the same way: here both push price down, so price is what you commit to and quantity is what you label indeterminate and tie to the relative sizes of the shifts.

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