Syllabus: Cambridge - IGCSE Economics
Module: 2.4 Supply
Lesson: 2.4.1 Definition of Supply

Introduction

The Cambridge IGCSE Economics syllabus introduces students to core economic principles, and section 2.4.1—Definition of Supply—lays a foundational building block for later understanding of market dynamics. This topic is critical as it enables students to grasp how producers behave in markets, especially in relation to price changes. For teachers and SLT aiming to connect curriculum delivery with Gatsby Benchmark 4, this is an ideal unit for exploring commercial decision-making and market behaviour in real-world business contexts.

Key Concepts

Aligned to the Cambridge IGCSE Economics specification (0455), section 2.4.1 Definition of Supply requires students to:

• Define supply as the quantity of a good or service that producers are willing and able to sell at a given price in a given time period.

• Understand individual supply (from one producer) and market supply (total from all producers).

• Identify that supply is price-driven, with higher prices typically increasing supply.

• Recognise the difference between a change in quantity supplied (movement along the curve) and a change in supply (shift of the supply curve).

Students should also be introduced to the law of supply, graphical representation of supply curves, and how supply relates to demand in a market economy.

Real-World Relevance

Understanding supply is key to decoding everyday economic situations. Consider these examples:

• Oil Prices: When global oil prices rise, producers such as OPEC nations increase output to capitalise on higher revenues—demonstrating the law of supply.

• Labour Shortages: During the COVID-19 pandemic, many sectors experienced reduced supply due to workforce unavailability, despite demand remaining high.

• Agricultural Output: Droughts or favourable weather conditions drastically shift agricultural supply curves, affecting everything from prices to availability in supermarkets.

Bringing these live scenarios into the classroom helps students see economics as a living subject—meeting the strategic goal of increasing workplace relevance in education .

How It’s Assessed

In Cambridge IGCSE Economics, supply is assessed through a range of structured and data-response questions. Teachers should prepare students to:

• Define and explain supply in 2- or 4-mark questions.

• Draw and interpret supply curves, distinguishing between movements along and shifts of the curve.

• Analyse supply-related scenarios, often through 6- or 8-mark questions requiring evaluation of changes due to external factors like taxes or subsidies.

• Use command words such as explain, analyse, and evaluate—with the latter requiring supported judgments.

Mark schemes reward clarity in diagrams, accuracy of terminology, and logical reasoning—a clear opportunity to build transferable analytical skills.

Enterprise Skills Integration

This topic is a gateway to broader commercial literacy:

• Decision-making: Students explore how businesses respond to incentives and external pressures—mirroring real-world strategic thinking.

• Problem-solving: Analysing supply shocks and their consequences fosters scenario-based thinking.

• Financial literacy: Understanding revenue implications of supply changes links directly to budgeting and profit management.

• Enterprise Skills’ simulations provide rich opportunities to embed these skills. Students can run virtual firms where they decide what to supply, when, and at what price—reinforcing learning through practice.

Careers Links

This topic aligns directly with Gatsby Benchmark 4 (linking curriculum learning to careers), particularly when framed within real organisational decision-making:

• Relevant roles: Logistics manager, supply chain analyst, buyer, economist.

• Sectors: Retail, manufacturing, agriculture, energy, and public sector procurement.

• Use of case studies from real employers, such as changes in stock levels at Amazon or Tesco in response to Black Friday or fuel shortages, can spark discussion.

• Skills taught here (analysis, interpretation, responsiveness to change) are explicitly valued by employers in our network.

Teaching Notes

• Common pitfalls: Students often confuse “quantity supplied” (movement along the curve) with “supply” (shift of the curve). Use animations or step-by-step diagrams to reinforce this distinction.

• Suggested activity: Role-play a market scenario where students take on different supplier roles (e.g. farmer, tech manufacturer) and adjust their supply decisions based on changes in price, costs, and regulations.

• Assessment tip: Encourage use of annotated supply curves in answers to explain cause-and-effect clearly.

• Cross-curricular links: Mathematics (graph work and interpretation), Geography (natural disasters and supply chains), and Business Studies (production costs and pricing decisions).

• Extension: Challenge students to consider non-price factors affecting supply—like technology or government policy—and link this to wider debates on regulation and sustainability.