Syllabus: Pearson Edexcel AS Business
Module: The Market
Lesson: 1.2.1 Demand

Introduction

This Pearson Edexcel AS Business lesson on Demand (1.2.1) sits within the broader Theme 1 module: Marketing and People. It follows naturally from the work on market structures and customer needs introduced in 1.1, and lays the microeconomic foundations that underpin both marketing strategy and pricing decisions throughout the rest of the course.

Students are introduced to the concept of demand, what causes it to shift, and how it can be visualised through demand curves. These insights are not only vital for academic progression but also offer practical understanding that connects directly to how businesses set prices, forecast sales, and respond to changing consumer behaviour.

This lesson directly supports Assessment Objective 1 (AO1) – demonstrating knowledge and understanding – and AO2 (AO2) – applying this knowledge to real-world contexts.

Key Concepts

• Definition of Demand: The quantity of a good or service that consumers are willing and able to buy at a given price in a given time period.
• The Law of Demand: As price falls, quantity demanded rises – assuming all other factors are held constant (ceteris paribus).
• Demand Curve: Downward sloping due to the inverse relationship between price and quantity demanded. Students should be able to draw and interpret simple linear demand curves.
• Factors Causing a Shift in the Demand Curve (Non-Price Determinants):
  • Changes in income (normal vs inferior goods)
  • Changes in tastes and fashion
  • Population and demographic trends
  • Price of substitutes and complements
  • External shocks (e.g. economic uncertainty, new tech, pandemics)
  • Seasonality
• Movement vs Shift: A change in price causes a movement along the curve; a change in any other factor causes a shift of the curve.
• Application of Demand Concepts: Students are expected to apply these ideas to different products and markets – e.g. how demand might change for smartphones or public transport.

Real-World Relevance

Demand is one of the most visible and relevant concepts for students, particularly in a world shaped by digital consumption, influencer marketing, and economic shocks. Here are two examples to bring this concept to life:

• Taylor Swift’s Eras Tour Ticket Surge: The unprecedented demand for tickets saw prices soar and websites crash. Demand here was driven by limited supply, strong brand loyalty, social proof, and perceived scarcity – classic non-price factors at play.
• Greggs and Seasonal Demand: The release of Greggs’ vegan sausage roll each January shows how firms align with seasonal trends and shifting consumer preferences (towards plant-based diets, in this case) to influence demand.

Encouraging students to bring their own consumption habits into the discussion deepens engagement – why did their last favourite product “go viral”? Why did a trend disappear?

How It’s Assessed

This lesson is likely to appear in Paper 1: Marketing and People, especially in Section A (short-answer knowledge) or as part of Section B (data response).

Common question formats include:

• Define (AO1): “Define the term ‘demand’.”
• Explain (AO1 + AO2): “Explain one factor that could cause a shift in the demand curve for coffee.”
• Analyse (AO2 + AO3): “Analyse how a change in income might affect demand for a luxury clothing brand.”
• Apply and interpret diagrams: Students may be asked to draw a shift in a demand curve and explain its cause/effect.

Command words to prep for:

• “Explain” – link cause and effect in logical steps
• “Analyse” – break down a scenario, show understanding of the underlying relationships
• “Evaluate” (when demand is part of broader questions)

Enterprise Skills Integration

This topic directly supports the development of analytical and decision-making skills – both central to the Enterprise Skills framework.

• Decision-Making: Students explore how firms respond to demand signals (e.g. changing pricing, launching new products).
• Problem-Solving: Considering what businesses can do if demand drops.
• Communication: Students need to explain demand scenarios clearly using diagrams and data.

You can extend the lesson using MarketScope AI, one of Enterprise Skills’ tools. It allows students to model how price changes impact demand across product types – ideal for teaching elasticity later, but also helps embed these foundations now through interactive exploration.

Careers Links

Understanding demand is core to roles across:

• Marketing and Sales – assessing what customers want and when
• Product Development – designing offers that meet consumer trends
• Business Strategy – aligning production and promotion with anticipated demand

This links directly to Gatsby Benchmark 4: linking curriculum learning to careers.

You could invite discussion around how demand forecasting works in retail (e.g. Zara’s fast fashion), hospitality (e.g. event-based pricing), or tech (e.g. new iPhone launches).

Teaching Notes

What helps:

• Start with relatable examples – iPhone launches, TikTok trends, or student life purchases.
• Use simple, interactive demand curve drawing tools – whiteboard battles or tools like Desmos.
• Always link demand shifts back to why a business would care – connect to pricing, revenue, and strategy.

Quick check activity:

• Give students a headline like “UK wage growth slows in 2025” and ask: Would this affect demand for Aldi, Waitrose, or both? Why?

Stretch task:

• Compare how a fall in demand impacts a luxury goods brand versus a public transport provider. Use demand curve diagrams and business implications.

Common misconceptions:

• Confusing movement along the curve with a shift.
• Thinking price alone determines demand (ignoring non-price factors).
• Forgetting real-world complexity – some products have inelastic demand regardless of price (e.g. insulin).

Empathy tip: Teachers often say they want more time for higher-order thinking but are under pressure to “get through the content”. This lesson is a great place to slow down and secure foundational understanding with impact, not just coverage.