When it comes to economics, there are many different concepts that you need to be familiar with.
One of these is supply and demand. Supply and demand are two forces that work together to create the price of goods in a market.
Let’s take a closer look at what they are, how they work, and why understanding this concept can benefit your business.
What are supply and demand? Supply is the total amount of a good or service that producers are willing to sell.
Demand refers to the quantity of goods consumers want at various prices during a given time period.
Figure A Price Diagram Showing Equilibrium In Quantity Supplied And Demanded At Different Prices (Source) Figure B Total Cost, Marginal Cost, Profit With Ordered Production (Source).
Supply Curve Shows The Relationship Between Unit Costs & Number Of Units Produced When Volume Is Held Constant As Price Changes.