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2.4 Price determination

Topic 2.4 - Price determination

This section of the Cambridge IGCSE Economics (0455) syllabus covers the following topics:

SectionTopicsGuidance
2.4.1Price mechanismHow the price mechanism provides answers to the basic resource allocation decisions of what, how, and for whom to produce
2.4.2Market equilibrium

Equilibrium price and equilibrium quantity in a market:

  • Definition of market equilibrium
  • Interpretation of equilibrium using demand and supply schedules
  • Drawing and interpretation of equilibrium using demand and supply curves
2.4.3Market disequilibrium

Disequilibrium prices and quantities:

  • Definition of market disequilibrium
  • Interpretation of disequilibrium using demand and supply schedules
  • Drawing and interpretation of disequilibrium using demand and supply curves

Shortages (demand exceeding supply) and surpluses (supply exceeding demand)

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