Syllabus: AQA - GCSE Economics
Module: 3.1.3 How prices are Determined
Lesson: 3.1.3.2 Supply for Goods and Services

Introduction

This article explores the AQA GCSE Economics module 3.1.3.2: Supply for Goods and Services, which sits under the wider theme of how prices are determined in a market economy. This concept is foundational to understanding economic decision-making and market behaviour, and is explicitly mapped within the AQA specification under section 3.1.3: How Prices Are Determined.

Teachers delivering this content are not only building economic literacy but also laying the groundwork for commercial awareness – a core competency identified in our cross-curricular curriculum map. For careers leads and SLT, this unit offers a clear opportunity to link curriculum learning with careers, directly aligning with Gatsby Benchmark 4.

Key Concepts

Within this unit, students should be able to:

• Define supply and understand the law of supply – as price increases, quantity supplied generally increases.

• Explain the difference between individual supply and market supply.

• Identify and analyse non-price determinants of supply, such as:

  • Changes in production costs

  • Technological advances

  • Government interventions (e.g. taxes and subsidies)

  • Weather and seasonal factors

• Illustrate supply using diagrams, including shifts in the supply curve.

• Interpret the impact of supply changes on market equilibrium when combined with demand dynamics.

These topics are designed to develop students’ ability to think critically about market outcomes, price fluctuations, and the role of producers in shaping economic activity.

Real-World Relevance

Understanding supply is vital in today’s economy, particularly in contexts such as:

• Energy prices: The UK’s energy sector has seen fluctuating supply due to global disruptions, impacting everything from household bills to business costs.

• Agricultural goods: Weather extremes and climate events regularly affect the supply of crops, as seen in the recent wheat shortages due to droughts in the US and Ukraine conflict disruptions.

• Technology products: Global chip shortages have constrained supply in the automotive and electronics sectors, pushing up prices and limiting availability.

Mini Case Study:
During the COVID-19 pandemic, the supply of PPE (personal protective equipment) struggled to keep up with global demand. This classic supply constraint, paired with inelastic demand, led to significant price increases—demonstrating supply-side economics in real time.

How It’s Assessed

Students are typically assessed on this topic through structured questions in AQA’s GCSE Economics Paper 1: How Markets Work. Assessment types include:

• Multiple-choice questions – testing understanding of terminology and supply shifts.

• Data response questions – requiring interpretation of supply curves and market changes.

• Short and extended writing – explaining causes of supply shifts or analysing supply responses to real-world events.

Key command words: explain, analyse, draw, identify, calculate. Students are often expected to draw and label supply curves correctly, showing shifts with arrows and applying context to their explanations.

Enterprise Skills Integration

This unit provides a rich opportunity to develop workplace readiness through core enterprise skills, including:

• Decision-making & problem-solving: Students apply economic logic to understand how businesses respond to changing costs and incentives.

• Data interpretation: Analysing supply curve shifts, interpreting economic data, and predicting outcomes based on changes in external factors.

• Strategic thinking: Considering how organisations must adapt supply strategies in response to environmental, technological or political changes.

Using business simulations – such as those available through Skills Hub Futures – schools can introduce scenarios where students must decide how much of a product to supply based on changing market conditions, building both curriculum understanding and workplace skills.

Careers Links

This unit naturally supports Gatsby Benchmarks 4, 5 and 6:

• Benchmark 4 (Linking curriculum learning to careers): Understanding supply dynamics is foundational in roles such as logistics manager, production planner, supply chain analyst, and retail buyer.

• Benchmark 5 (Encounters with employers and employees): Real-world supply case studies can be enhanced through guest talks from procurement professionals or local manufacturers.

• Benchmark 6 (Experiences of workplaces): Skills Hub simulations simulate real-time supply decisions in dynamic markets, giving students practical exposure to employer-validated challenges.

Teaching Notes

Recommended strategies:

• Use active learning: Implement supply chain role-play, where students act as producers responding to changing market data – aligning with evidence showing 73% better comprehension through active learning.

• Graph drawing drills: Frequent practice drawing and interpreting supply curves builds confidence and prepares students for visual data questions.

• Contextualisation: Bring in fresh headlines from retail, energy, or agriculture to ground abstract supply concepts in real life.

Common pitfalls:

• Confusing shifts in the supply curve with movements along the curve.

• Overlooking external factors like taxes or subsidies as non-price influences.

• Mislabelled axes or incorrect curve directions in diagrams.

Extension ideas:

• Investigate the supply challenges in fast fashion or seasonal tourism.

• Create a debate around government intervention in agricultural supply.