Supply and Demand

Supply and Demand is an economic concept which states that supply and demand of goods and services affects the pricing in a free market. It describes the relationship between sellers and buyers and the resulting equilibrium of the market price. Supply and Demand are two opposing forces, when demand increases, prices and the quantity of goods offered increases as well. If supply decreases and demand increases, prices go up and the quantity of goods decreases. This concept is used by companies and organisations to better understand consumer preferences and market trends, and how to adjust their pricing accordingly. It is also an important factor in the economics of production and pricing.