Syllabus: Pearson - Pearson - A Level Economics
Module: 1.2 How Markets Work
Lesson: 1.2.2 Demand
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Introduction
This lesson covers Section 1.2.2 of the Pearson Edexcel A Level Economics A Specification: Demand. As part of Theme 1: Introduction to Markets and Market Failure, this topic helps students explore how consumer behaviour shapes the market. By unpacking movements and shifts in demand curves, and anchoring this in the theory of marginal utility, teachers can link textbook economics to the choices students make every day—what they buy, when, and why.
Understanding demand is not just a foundation for economic theory, it’s essential for later units on price elasticity, revenue, and market failure. It connects directly to the quantitative skills students will need in their assessments, while also offering real insight into decision-making across industries and governments.
Key Concepts
Students should be able to:
Differentiate between a movement along a demand curve and a shift in the demand curve.
Identify factors that cause shifts in demand (known as conditions of demand), such as changes in income, tastes, demographics, or prices of related goods.
Understand and apply the concept of diminishing marginal utility, which explains why demand curves slope downward.
Interpret how these shifts and movements affect equilibrium price and quantity when combined with supply-side factors (preparation for 1.2.6).
Use diagrams accurately to model demand changes and explain them clearly using economic language.
Real-World Relevance
Take smartphones. When a new iPhone drops, demand shifts—not just because of advertising, but also peer influence, tech specs, and brand loyalty. Meanwhile, the price of substitute Android phones, like the Google Pixel, can affect iPhone demand too. These are real-world examples of shifts in the demand curve.
More broadly, think of energy prices. As consumers react to spikes in electricity bills by reducing usage or investing in smart meters, we can see shifts in demand driven by income sensitivity and consumer preferences—especially relevant in today’s cost-of-living context.
How It’s Assessed
Pearson assessments expect students to:
Draw and explain demand diagrams with clarity.
Analyse short data extracts or real-life scenarios to identify demand shifts and justify them using economic terminology.
Use command words like explain, analyse, and evaluate. Students need to build chains of reasoning that tie diagram changes to market outcomes.
Handle numerical calculations involving percentage changes in quantity demanded (linking to later elasticity work).
Typical questions might include:
“Explain two reasons why the demand for public transport might increase.”
“Using a diagram, analyse how a rise in the price of petrol affects the demand for electric cars.”
Encourage students to practise both diagram-heavy and narrative responses.
Enterprise Skills Integration
This topic naturally builds analytical thinking and decision-making skills. Students learn to evaluate choices, weigh trade-offs, and justify actions—core enterprise behaviours.
Try using short activities that model business decisions, like:
“You’re a new cinema. What pricing or promotional strategies would shift demand for your weekday matinees?”
“You run an online clothing store. How might changes in youth fashion trends influence your inventory planning?”
These simulations don’t just consolidate theory—they help learners think commercially and practically.
Careers Links
Understanding demand has clear relevance for roles in:
Marketing and advertising (predicting how campaigns will influence consumer behaviour)
Data analysis (spotting patterns in consumer demand)
Retail and buying (anticipating seasonal trends)
Policy-making (forecasting public demand for services)
Mapped to Gatsby Benchmarks 4, 5, and 6, this topic gives students insight into how economic concepts apply in the workplace. Consider inviting a guest speaker in retail or market research to illustrate demand forecasting in action.
Teaching Notes
Common pitfalls
Students often confuse a movement along the demand curve with a shift. Reinforce that price changes cause movements, while non-price factors cause shifts.
Another trap: listing demand factors without linking them to actual market behaviour. Encourage students to always use specific examples.
Time-saving tips
Use dual-axis diagrams to compare before-and-after demand scenarios on the same graph.
Embed brief “market flash” case studies—mini news items that connect demand theory to what’s happening in the world right now.
Extension ideas
Introduce behavioural economics with a look at irrational consumer choices. How do habits, trends, and social media distort traditional demand models?
Challenge high-attaining students to explore the relationship between marginal utility and pricing strategies (e.g. bundling, loyalty discounts).
