Your task: Capture the market at cost shifts 0 and 4. Annotate the marginal trade that disappears and distinguish the pricing convention from the trade-gain calculation.
Read counts with their units. A percentage divides a part by its named whole and multiplies by 100. A model assumption is not an observed fact.
Marginal trade
The next or last unit considered when deciding exchange quantity.
Assumption
A condition accepted for a model or argument; it needs justification before applying the result elsewhere.
01 · TRY
Which trades remain worthwhile after costs rise?
Capture the market at cost shifts 0 and 4. Annotate the marginal trade that disappears and distinguish the pricing convention from the trade-gain calculation.
Capture the market at cost shifts 0 and 4. Annotate the marginal trade that disappears and distinguish the pricing convention from the trade-gain calculation. Use the supplied records and show one intermediate step.
Make a provisional claim
Loading saved evidence…
Inspect evidence and test an explanation
The investigation controls appear when your local evidence is ready.
04 · UNDERSTAND
Connect evidence and mechanism
Trace exchanges from buyer and seller schedules
Start with the question
Which trades remain worthwhile after costs rise?
Inspect the teaching record
Five fictional buyers value one unit each at 12, 10, 8, 6 and 4 credits. Five sellers have one-unit costs of 2, 4, 6, 8 and 10. Buyers are ordered high to low and sellers low to high.
This is fictional teaching evidence. It is not an observation about an actual community or economy.
Explain the mechanism
Demand connects willingness to buy with price; supply connects willingness to sell with price. A cost change shifts the seller schedule, while a movement along a fixed schedule follows a price change. Trade gains are buyer value minus seller cost. These schedules exclude income changes, strategic behavior and uncertainty.
Follow the worked example
Before the shock, three trades have gains 10, 6 and 2: total 18. After +4 cost, only two trades have nonnegative gains, 6 and 2: total 8. The specified price changes from 7 to 9.
Challenge the first explanation
A cost shock adds 4 credits to every seller. Preferences are held fixed. The classroom uses the midpoint of the last traded buyer value and seller cost as its uniform price; real price formation is not simulated.
Make and revise your evidence
Capture the market at cost shifts 0 and 4. Annotate the marginal trade that disappears and distinguish the pricing convention from the trade-gain calculation.
Revise your answer to “Which trades remain worthwhile after costs rise?” using both source IDs. Separate the checked calculation from a judgment, and identify evidence that could reverse your judgment.
Name the idea
Marginal trade: The next or last unit considered when deciding exchange quantity.
Assumption: A condition accepted for a model or argument; it needs justification before applying the result elsewhere.
Extend the investigation
Independently extend the investigation “Trace exchanges from buyer and seller schedules” with a documented real dataset or scholarly source. Preserve definitions, recreate one calculation or evidence table, compare a rival explanation and report why the teaching example cannot establish the real-world conclusion.
Separate a posted price from a market shift
Before using the controls, draw price vertically and quantity horizontally. Label the units. At a posted price of 4, the original continuous schedules below give eight planned purchases and four planned offers. Predict what changes when only price rises to 6. Then predict what changes when more buyers enter while the posted price stays fixed.
Test a posted price before changing a curve
A separate fictional continuous market: quantities are units per day and prices are credits per unit. Predict the imbalance at price 4, then try 6 and 8 without changing the scenario. This model does not use the earlier five-person market's midpoint convention.
No driver changes. Changing the scenario holds the posted price at 4; it does not automatically move to the new clearing price.
Solid line/circle: demand and quantity demanded. Dashed line/square: supply and quantity supplied. Dotted line: posted price. Diamond: clearing point. At clearing, the markers overlap. Where a formula would give a negative quantity, quantity is zero; its posted-price marker stays on the vertical axis.
Demanded quantity = max(0, 12 − price). Supplied quantity = max(0, price − 0). The max operation selects zero whenever the expression is negative.
Current scenario; quantities are planned purchases/offers, not observed sales
Measure
At posted price
At clearing price
Price, credits/unit
4
6
Quantity demanded, units/day
8
6
Quantity supplied, units/day
4
6
Shortage, units/day
4
0
Excess supply, units/day
0
0
Shortage of 4: upward price pressure in the flexible-price model.
With fixed schedules and flexible prices, buyers competing for scarce offers or sellers competing for buyers can move price toward clearing. This is conditional reasoning, not a simulated adjustment speed or a guarantee about actual markets. A legal price restriction can prevent that adjustment. No transactions, queues or rationing rule are simulated.
Record scenario, price, both quantities and your explanation in the source notebook. These controls are temporary, reset on reload and are not included in the earlier market-lab captures.
Explain movement before shifting a curve
In the original scenario, compare prices 4, 6 and 8. The demand and supply relationships stay fixed: the points move along them. A higher own price lowers quantity demanded and raises quantity supplied under these assumptions. Calling this a demand increase confuses a new point with a new schedule.
Now return price to 4 and select the demand increase. The number willing to buy rises from 8 to 12 at the same price; the seller’s four offered units do not change. The increased shortage is eight. If price is free to adjust, the new clearing point is price 8, quantity 8. The rise in quantity supplied comes from movement along the unchanged supply relationship.
Try the input-cost scenario separately. At price 4, offered quantity falls from 4 to 0 while planned purchases remain eight. At its new clearing point, price is 8 and quantity is 4. The higher clearing price does not mean supply increased: supply shifted left/up and the equilibrium quantity fell.
A second possible supply driver is a productivity improvement. In a separate practice market, initial demand is Qd=12−P and supply Qs=P−2 for prices at least 2. A new production method changes supply to Qs=P, leaving demand fixed. Predict the direction, then solve both clearing points. The improvement is stipulated; a real causal claim would need evidence about costs and other changes.
Check the productivity comparison
Initially 12−P=P−2 gives price 7 and quantity 5. After the improvement, 12−P=P gives price 6 and quantity 6. At a fixed price of 7, offered quantity rises from 5 to 7. The final quantity demanded rises by movement along the unchanged demand curve. Lower input cost and improved productivity can shift supply in the same direction, but they are different mechanisms.
Test what simultaneous shifts actually establish
Predict the result of stronger demand together with reduced supply before inspecting all three combined scenarios. Compare each with the original clearing point of price 6, quantity 6. Make a table of old/new price, old/new quantity, the two changed drivers and the conclusion that holds across all three cases.
Check the simultaneous-shift counterexamples
Equal-size changes give price 10, quantity 6. The larger supply change gives price 12, quantity 4. The larger demand change gives price 12, quantity 8. Price rises in all three examples; quantity can stay constant, fall or rise. Knowing only these shift directions does not establish the quantity direction. These examples use particular linear slopes and specified magnitudes; they do not estimate any real market.
Transfer: diagnose an unfamiliar price announcement
A different fictional market has Qd=18−2P and Qs=P, with nonnegative quantities and price measured in credits per unit. A posted price of 4 is announced. Calculate the two quantities and the gap, solve the clearing price, and draw the relationship between the posted and clearing points. Then suppose 4 is a binding legal maximum. Explain why the same initial gap no longer licenses a claim that sellers can freely raise price to clear the market. Do not invent who obtains the available units.
Check the unfamiliar posted-price case
At price 4, planned purchases are 10 and offers are 4, a shortage of 6 units per day. Clearing requires 18−2P=P, so price is 6 and quantity 6. With price held legally at 4, the model retains the shortage; an allocation rule and compliance evidence would be needed to describe actual transactions. A shortage counts unfulfilled planned purchases at the stated price, not a negative stock of goods or proof that six extra units were produced.
For high-school practice, use the supplied ledger and explain each driver in words. For AP practice, draw and label a new graph before consulting feedback. For introductory-college work, defend the assumptions behind a documented market episode and distinguish a model’s conditional prediction from identified causation. Open answers support practice; they do not independently grade graph construction or establish mastery.
Worked example
Before the shock, three trades have gains 10, 6 and 2: total 18. After +4 cost, only two trades have nonnegative gains, 6 and 2: total 8. The specified price changes from 7 to 9.
