what is supply and demand?
Supply is what someone has (goods or services for sale or barter); demand is how much of it people want.
Here are two excellent sites explaining supply and demand.
http://www.investopedia.com/university/economics/economics3.asp
http://en.wikipedia.org/wiki/Supply_and_demand
Supply and demand is a fundamental concept in economics that explains the relationship between the availability of a product or service (supply) and the desire or need for that product or service (demand). It reflects how prices and quantities of goods and services are determined in the market.
Supply refers to the quantity of a particular product or service that producers or suppliers are willing and able to sell at a given price and within a given time period. It pays attention to factors such as the cost of production, available resources, technology, and the number of suppliers in the market. As the price of a good or service increases, suppliers are generally incentivized to produce more, resulting in an upward-sloping supply curve.
Demand, on the other hand, represents the quantity of a product or service that consumers are willing and able to buy at a given price and within a given time period. It is influenced by factors like consumers' income, preferences, expectations, and the prices of other related goods. Generally, as the price of a good or service decreases, the quantity demanded increases, resulting in a downward-sloping demand curve.
The intersection of the supply and demand curves in a market represents the equilibrium, where the quantity supplied matches the quantity demanded, and the market is considered to be in balance. Changes in either supply or demand factors can shift the curves, affecting the equilibrium price and quantity.
Understanding supply and demand is important because it helps explain how prices of goods and services are determined, how markets behave, and how changes in economic conditions or policies can impact the availability and affordability of products and services.