Supply and Demand Lab: Set Price Ceilings and Floors
Explore a linear supply and demand model. Change prices and controls to see equilibrium, binding limits, shortages, and surpluses.
Free, with no sign-up.
For High school students and adults reviewing the topic.
About 8 minutes.
How does it work?
- Choose a ceiling or floor and set the controlled price.
- Adjust the linear schedules or choose a preset.
- Compare quantities at the effective market price, then check a challenge.
What will you get?
Read the equilibrium, identify a binding control, and measure the quantity gap.
What does the model assume?
- All numbers are illustrative. They do not describe a real market.
- Demand is Qd = a − bP and supply is Qs = c + dP, with positive slopes b and d. Negative calculated quantities are treated as zero.
- The model is a competitive market with fixed schedules, full enforcement, and no taxes, subsidies, or government purchases.
- A ceiling binds only below equilibrium; a floor binds only above equilibrium. Only the selected control operates.
- For a binding control, the effective price equals the controlled price. Otherwise the effective price remains at equilibrium.
- The model reports desired quantities and the shortage or surplus. It does not determine who trades or how scarce goods are allocated.
Which setup would you like to try?
What can you change?
Range: 50 to 200 units.
Range: 1 to 10 units per dollar.
Range: 0 to 40 units.
Range: 1 to 10 units per dollar.
Range: 0 to 100 dollars.
What does the model predict?
The selected control binds.
| Quantity | Value | Unit |
|---|---|---|
| Equilibrium price | 10 | dollars |
| Equilibrium quantity | 50 | units |
| Effective market price | 6 | dollars |
| Quantity demanded at the effective price | 70 | units |
| Quantity supplied at the effective price | 30 | units |
| Shortage | 40 | units |
| Surplus | 0 | units |
- Demand
- Supply
- Selected price control
Can you reach these targets?
With Qd = 100 − 5P and Qs = 5P, set a ceiling that creates a shortage of 40 units.
- Target: Demand intercept a = 100 units; tolerance 0 units.
- Target: Demand slope b = 5 units per dollar; tolerance 0 units per dollar.
- Target: Supply intercept c = 0 units; tolerance 0 units.
- Target: Supply slope d = 5 units per dollar; tolerance 0 units per dollar.
- Target: Shortage = 40 units; tolerance 0.01 units.
- Control to apply (Price ceiling)
With Qd = 100 − 5P and Qs = 5P, set a floor that creates a surplus of 20 units.
- Target: Demand intercept a = 100 units; tolerance 0 units.
- Target: Demand slope b = 5 units per dollar; tolerance 0 units per dollar.
- Target: Supply intercept c = 0 units; tolerance 0 units.
- Target: Supply slope d = 5 units per dollar; tolerance 0 units per dollar.
- Target: Surplus = 20 units; tolerance 0.01 units.
- Control to apply (Price floor)