Supply and Demand

Supply and demand are fundamental concepts in economics that describe how the market works. Supply refers to the quantity of a product or service that producers are willing to sell at various prices, while demand refers to how much of a product or service consumers are willing to purchase at different price points.

When demand for a product exceeds its supply, prices tend to rise; conversely, when supply outstrips demand, prices usually fall. This relationship helps to determine the market equilibrium, where the quantity supplied equals the quantity demanded.