Supply and Demand

Definition

Supply and demand refers to the concept in economics where the quantity of a good or service that producers are willing to sell (supply) matches the quantity that consumers are willing to buy (demand). It is influenced by factors such as price, availability, and consumer preferences.

Related terms

Equilibrium: The point where supply equals demand in a market, resulting in stable prices.

Surplus: When the quantity supplied exceeds the quantity demanded, leading to excess inventory.

Shortage: When the quantity demanded exceeds the quantity supplied, resulting in insufficient goods or services available.