Syllabus: AQA - GCSE Economics
Module: 3.1.3 How prices are Determined
Lesson: 3.1.3.1 Demand for Goods and Services

Introduction

This article focuses on AQA GCSE Economics Unit 3.1.3.1: Demand for Goods and Services, a fundamental part of the “How prices are determined” section. It introduces students to how consumer behaviour shapes markets, enabling them to understand how demand curves function and what causes them to shift. As part of the national curriculum, this topic lays essential foundations for commercial literacy and real-world application, particularly for students developing workplace readiness and broader economic thinking.

Aligned to the AQA 8136 specification, this unit is vital for interpreting market signals, predicting consumer behaviour, and making informed economic decisions. It naturally supports Gatsby Benchmark 4 (linking curriculum learning to careers), offering direct connections to workplace and consumer economics.

Key Concepts

Students are expected to understand and apply the following:

• Definition of demand – the quantity of a good or service that consumers are willing and able to buy at a given price.

• The demand curve – downward-sloping to reflect the inverse relationship between price and quantity demanded.

• Movement along the demand curve – caused by price changes (contraction/extension of demand).

• Shifts in the demand curve – caused by non-price factors such as:

  • Changes in income

  • Changes in the price of substitutes or complements

  • Changes in consumer tastes and preferences

  • Advertising and marketing

  • Demographic changes

• The distinction between changes in quantity demanded and changes in demand – a critical concept in both diagrams and written answers.

These concepts enable students to evaluate how and why consumers react to price signals in competitive markets and how this shapes overall economic activity.

Real-World Relevance

Demand is central to everyday economic decisions. Understanding this concept allows students to interpret events such as:

• Black Friday pricing – Why do consumers rush to buy discounted goods, and how does this affect demand curves?

• Netflix subscription shifts – A recent price hike in streaming services led some consumers to switch to alternatives, illustrating substitute effects.

• Electric vehicle adoption – As government incentives increase and public awareness grows, demand for EVs has shifted outward, even with higher prices, due to non-price factors like environmental concern.

These examples make abstract economic ideas tangible and underscore the influence of demand in real-time decision-making, both as consumers and future professionals.

How It’s Assessed

Assessment in this topic typically includes:

• Data response questions – students interpret demand curves or market data and apply relevant concepts.

• Short answer definitions – e.g. “What is meant by the term demand?”

• Diagram-based questions – students draw or analyse shifts or movements on a demand curve.

• Extended response questions (6-9 marks) – requiring evaluation of how a given scenario impacts demand, using diagrams and reasoning.

Command words include:

• Identify

• Explain

• Analyse

• Evaluate

Students must use accurate terminology and link points logically, often referencing diagrams. Quality of written communication is assessed in longer responses, so clarity and structured thinking are key.

Enterprise Skills Integration

This topic offers rich opportunities to build commercial awareness and decision-making capabilities. Skills developed include:

• Market dynamics understanding – grasping how buyer behaviour influences outcomes.

• Analytical thinking – interpreting real-world scenarios using economic frameworks.

• Communication – explaining complex changes in demand clearly through diagrams and writing.

These directly map to Enterprise Skills’ core themes of Decision-Making & Problem-Solving and Commercial Awareness. For instance, students could analyse whether a business should lower prices or focus on marketing to increase demand, applying theoretical insight to commercial reasoning.

Careers Links

Demand analysis connects directly to roles in:

• Marketing – understanding what drives consumer interest and how to influence it.

• Retail buying – predicting product demand and managing stock levels.

• Business analysis – interpreting trends to support pricing and strategy decisions.

• Government policy – assessing how changes in taxation or subsidies influence public consumption.

In line with Gatsby Benchmark 4 and 5, linking classroom learning to these real-world roles enhances student awareness of career pathways. Skills Hub Futures supports this through career-linked sessions like Understanding Business Models and Customer Focus.

Teaching Notes

Classroom Tips:

• Use visual aids – Consistently integrate supply and demand diagrams with scenario-based questioning.

• Active learning – Run a “market simulation” in class where students experience price changes and their impact on buying decisions.

• Case study integration – Bring in current events (e.g. energy prices or fast fashion) to evaluate demand shifts.

Common Pitfalls:

• Confusing movement along the curve with shifts of the curve.

• Ignoring non-price factors when analysing demand changes.

• Poorly labelled or inaccurate diagrams.

Extension Activities:

• Debates – “Should public transport be subsidised to increase demand?”

• Mini-investigations – Students research and present how demand for a specific product has changed due to recent events.

Tools from Enterprise Skills:

• Use Skills Hub tools like the Break-Even Calculator and Market Dynamics Explainer to integrate commercial awareness alongside economics content.