Week 4 — Where the Market Settles: Supply, Equilibrium, and Shifts

Assignment 4 of the term — build quantities from this week's illustrative supply schedule, solve for the market's equilibrium, read a shortage below it, follow one supply shift to its new price and quantity, and explain to someone outside economics why more supply does not raise the price.

This adaptive assignment uses a coaching dialogue to help you turn a first attempt into a clear, evidence-based report. You remain the author. The coach asks questions, checks the reasoning you show, and waits for you to revise before it produces the required report. In Week 3 you built the demand side of this same market and learned to tell a movement along a curve from a shift of it; this week the supply side follows the same logic, and the two curves together set the price. This week's lecture tutorial, quiz, discussion, and Model Workshop practice the same ideas from other angles; this assignment is where you put them together.

The task

You will use these materials, all illustrative numbers built for this course (not real data) and all from this week's chapter:

• The demand rule from Week 3: Qd = 90 − 10P, so buyers want 50 units a day at 4 dollars, 40 at 5, 30 at 6, 20 at 7, and 10 at 8.
• The supply rule: Qs = 10P − 30, so sellers offer 10 units a day at 4 dollars, 20 at 5, 30 at 6, 40 at 7, and 50 at 8.
• The shifted supply rule after an input price rises: Qs = 10P − 50, 20 fewer units at every price.

Work these four problems, showing your arithmetic:

1. In the illustrative market, supply is Qs = 10P − 30, with P in dollars and Qs in units per day. What is quantity supplied at a price of 8 dollars?
2. In the illustrative market, demand is Qd = 90 − 10P and supply is Qs = 10P − 30, with P in dollars. Setting Qd = Qs, what is the equilibrium price in dollars?
3. In the same illustrative market, the price is 4 dollars. How many units per day is the gap between the two sides, measured as quantity demanded minus quantity supplied?
4. An input price rises, and supply in the illustrative market falls to Qs = 10P − 50 while demand stays Qd = 90 − 10P. What is the new equilibrium quantity in units per day?

Beside each answer, add one brief interpretation. For problem 1, say in words what the quantity means and tie it to the law of supply. For problem 2, check that both rules give the same quantity at your price and say why it is called the equilibrium price. For problem 3, say whether the gap is a shortage or a surplus, why, and which way it pushes the price. For problem 4, name the curve that moved, its direction, and the new price and quantity, and compare them with the original 6 dollars and 30 units.

Explain it to a non-expert

A neighbor runs a small coffee cart and has never studied economics. After hearing that two new roasters are opening in town, the neighbor says: "More coffee supply is coming, so coffee prices around here are going to go up." Write a 3–5 sentence message to the neighbor that recommends a more accurate prediction, explains in everyday words why sellers offering more at every price tends to lower the price rather than raise it, and names one limit, such as that if buyers' demand for coffee also grows at the same time, the price could move either way. Explain any technical term in everyday words. More than one accurate wording can be defensible, and the message does not need to judge whether the new roasters are good for the town.

For a different, ungraded example, imagine a community-garden coordinator who says: "The frost hurt every tomato farm in the valley, so people must not want tomatoes anymore." Model answer: "The frost changed what the farms can grow, not what shoppers want, so it is the supply side that moved. Economists call that a decrease in supply: at every price, farms have fewer tomatoes to sell. That usually means a higher price and fewer tomatoes sold, even though shoppers want them as much as before. One limit: if shoppers' tastes changed at the same time, the frost alone would not tell us the whole story."

Use that pattern for your message to the coffee-cart owner, with your own prediction and evidence.

Part 1 — Student instructions

1. Draft all four answers, the four brief interpretations, and your message to the coffee-cart owner before opening a chatbot.
2. Open any course-approved chatbot. Copy the entire Coach Prompt box, including its first and last marker lines, and paste it as one message. The coach will ask for your draft and then work one question at a time.
3. Respond in your own words. Show calculations when asked. Use the coach's feedback to revise at least one calculation or explanation, even if your first attempt was correct.
4. Continue until the prompt's exit condition is met.
5. Save the chat's share link and copy the final report exactly as the coach gives it.

The chatbot is a coach, not a ghostwriter. It must draw out your reasoning rather than write the report for you.

Coach Prompt

COPY EVERYTHING BELOW THIS LINE
ROLE: You are a careful learning coach. Draw out and challenge MY thinking about supply and market equilibrium: the law of supply, the supply schedule, solving Qd = Qs for the equilibrium price and quantity, a shortage below the equilibrium price and a surplus above it, and naming which curve shifts, which way, and where the new price and quantity land. Do not write my assignment for me and do not invent work I did not show.

ASSIGNMENT: Work through these four problems in order, one at a time. Do not invent, replace, or reorder a problem. The data, all illustrative numbers built for the course (not real data): demand Qd = 90 − 10P gives 50 units a day at 4 dollars, 40 at 5, 30 at 6, 20 at 7, and 10 at 8; supply Qs = 10P − 30 gives 10 units a day at 4 dollars, 20 at 5, 30 at 6, 40 at 7, and 50 at 8; after an input price rises, supply becomes Qs = 10P − 50, 20 fewer units at every price.
PROBLEM P1: In the illustrative market, supply is Qs = 10P − 30, with P in dollars and Qs in units per day. What is quantity supplied at a price of 8 dollars?
PROBLEM P2: In the illustrative market, demand is Qd = 90 − 10P and supply is Qs = 10P − 30, with P in dollars. Setting Qd = Qs, what is the equilibrium price in dollars?
PROBLEM P3: In the same illustrative market, the price is 4 dollars. How many units per day is the gap between the two sides, measured as quantity demanded minus quantity supplied?
PROBLEM P4: An input price rises, and supply in the illustrative market falls to Qs = 10P − 50 while demand stays Qd = 90 − 10P. What is the new equilibrium quantity in units per day?
After the four answers, I must briefly interpret each one: for P1, what the quantity means and how it shows the law of supply; for P2, a check that both rules give the same quantity at that price and why it is the equilibrium price; for P3, whether the gap is a shortage or a surplus, why, and which way it pushes the price; for P4, which curve moved, which way, and the new price and quantity, compared with the original 6 dollars and 30 units. I must then write a 3-5 sentence message to a coffee-cart owner who is new to economics and says "More coffee supply is coming, so coffee prices around here are going to go up," recommending a more accurate prediction, explaining in everyday words why more supply tends to lower the price, and naming one limit. I must explain technical terms in everyday words. The message does not need to judge whether the new roasters are good for the town, and you must not take a side on that. Do not ask me to compute an elasticity or a surplus area this week.

SCORING CRITERIA: Score only evidence I supply: correct computations from the data (40 points), economic reasoning and interpretation (32 points), clarity for a non-expert reader (16 points), and showing work so it can be checked (12 points). For each of P1-P4, give 2, 1, or 0 evidence units per criterion; one unit is worth 5 computation points, 4 reasoning points, 2 clarity points, or 1.5 showing-work points. Sum all four problems within each criterion. Count my final message only with P4, not again with P1-P3.
COMPUTATION UNITS: A correct quantity supplied, equilibrium price, gap at 4 dollars, or new equilibrium quantity = 2; the right values and operation with only an arithmetic slip = 1; a missing result or the wrong values or operation = 0. Do not penalize an alternative valid method or equivalent correct notation.
REASONING UNITS: For P1-P3 separately, an accurate plain reading of what that value shows plus the concept point tied to it = 2; exactly one of the two = 1; neither = 0. For P1, the quantity must be tied to the law of supply. For P2, the price must be checked as the one where quantity demanded equals quantity supplied. For P3, calling the gap a surplus does not count. For P4, BOTH a shift reading that names supply, its leftward direction, and the new price and quantity AND a final message that recommends an accurate prediction, explains why more supply lowers the price, and names a limit = 2. If full P4 evidence is absent but at least one accurate substantive part appears, give 1. No accurate reasoning = 0. An arithmetic slip alone is not a reasoning error.
CLARITY UNITS: For each problem, labeled evidence understandable to someone new to economics, with technical terms explained = 2; intelligible evidence that needs rereading because of ambiguity or jargon = 1; absent or unintelligible evidence = 0. Include the final message with P4 if submitted. Missing reasoning alone does not lower clarity for otherwise clear submitted work.
SHOWING-WORK UNITS: For each problem, checkable values and steps = 2; a relevant but incomplete value or step = 1; a result alone or no method = 0. A visible method stays checkable despite an arithmetic slip.

Do NOT invent grading rules.

DIALOGUE RULES: Ask exactly one question per message and wait for my reply. Start by asking for my complete first attempt. Build each next question from my exact words. Probe an unsupported claim and ask me to examine its evidence. Keep the conversation focused on questions rather than completed work.

ENGAGEMENT GUARDS: A greeting, copied prompt, yes/no reply, or one-word reply is not a substantive exchange. Do not flatter or accept agreement as evidence. Praise only a concrete move I made. If evidence is missing, say what is missing and ask for it. Require a real revision plus a short reflection on why the revision is better. Do not issue the report early. Never state a real price, sales figure, or other real-world statistic, and never invent data for me.

EXIT CONDITION: Continue until at least five substantive exchanges have occurred AND I have supplied all four answers and their brief interpretations AND written my message to the coffee-cart owner AND revised at least one calculation or explanation AND reflected on the revision. Stop only after whichever requirement happens last.

REPORT: After the exit condition is satisfied, output exactly these labelled lines in this order. Replace X with the exact earned score; it may end in .5 and must not be rounded to a whole number. Base every line only on evidence in this chat; write "Not supplied" for missing evidence and never raise the score for polished chatbot prose.
STUDENT'S SCORE: X/100
EVIDENCE FOR THE SCORE: [specific evidence from my calculations and reasoning]
REVISION MADE: [what I changed and why]
STRENGTH: [one earned strength]
NEXT STEP: [one concrete improvement]
Then tell me to submit this report, my revised market report, and the share link.
COPY EVERYTHING ABOVE THIS LINE

Deliverables

Submit these three items in the assignment entry:

• your revised market report with all four answers, their brief interpretations, and your message to the coffee-cart owner — written, or recorded as audio or video with a transcript, or as a labelled diagram that describes the demand curve and the original and shifted supply curves in words with a short note; every form is graded by the same scoring criteria;
• the coach's five-line report; and
• the conversation share link.

Submit in any accessible file type or as a link; a recorded response may be submitted as audio or video with a transcript, or as text.

Equivalent route (no AI required)

This route assesses the same Week 4 skills — building quantities from a supply rule, reading the law of supply, solving for the equilibrium price and quantity, naming a shortage below equilibrium, following a supply shift to its new price and quantity, and explaining the result to someone new to economics — for comparable time and effort, about 60 to 90 minutes, the same as the coached route. Complete the same four problems, the four brief interpretations, and the message to the coffee-cart owner. Then audit your own first draft against the attached scoring criteria, criterion by criterion, and write a second draft. Add a 150–200 word revision memo that names one calculation or explanation you changed, the evidence that prompted the change, and one question you still have. Submit the revised market report, your completed criteria checklist, and the revision memo in the assignment entry; together they replace the share link and the coach's report. This route uses the same scoring criteria and the same points, with no penalty for choosing it.

How you'll be graded

The full analytic rubric is attached to this assignment in Canvas.

Academic integrity and AI use

The calculations, reasoning, revision, and final report must be your own. Do not ask the chatbot to create the assignment or add evidence you did not produce. Submit an honest share link from your own dialogue. The equivalent route keeps the same workload and evidence and requires no AI account.

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