Supply & Demand Simulator
Why do prices go up and down? Run a lemonade market: shift demand and supply with real-world events, set your own price, and watch what happens on the graph.
Try a real-world event
Law of demand
When the price goes up, people buy less. When it goes down, they buy more. The demand line slopes down.
Law of supply
When the price goes up, sellers want to sell more, because it’s more profitable. The supply line slopes up.
Equilibrium
The price where the amount buyers want equals the amount sellers offer. Markets tend to move toward it.
Shortage
If the price is below equilibrium, buyers want more than sellers offer. Lines form and prices tend to rise.
Surplus
If the price is above equilibrium, sellers have extra they can’t sell. They cut prices to clear it.
What shifts the lines?
Demand shifts with tastes, income, weather, population and the prices of related goods. Supply shifts with costs, technology, number of sellers and natural events.