Content Standard 7: Markets and Prices
Grade 8 Benchmarks
1. Market prices are determined through the buying and selling decisions made by buyers and sellers.

Grade 12 Benchmarks
2. A shortage occurs when buyers want to purchase more than producers want to sell at the prevailing price.
3. A surplus occurs when producers want to sell more than buyers want to purchase at the prevailing price.

Content Standard 8: Role of Prices
Grade 8 Benchmarks
1. An increase in the price of a good or service encourages people to look for substitutes, causing the quantity demanded to decrease, and vice versa. This well-established relationship between price and quantity demanded, known as the law of demand, exists as long as other factors influencing demand do not change.
2. An increase in the price of a good or service encourages producers to supply more, and vice versa. This relationship between price and quantity supplied is normally true as long as other factors influencing costs of production and supply do not change.

Grade 12 Benchmarks
3. Changes in supply or demand cause relative prices to change; in turn, buyers and sellers adjust their purchase and sales decisions.
4. Government-enforced price ceilings set below the market-clearing price and government-enforced price floors set above the market-clearing price distort price signals and incentives to producers and consumers. Price ceilings can cause persistent shortages, while price floors can cause persistent surpluses.

• Economic Lowdown Audio Series—Price Signals
• Economic Lowdown Video Series—Equilibrium
• Demand Online Module
• Supply Online Module