Updated: Sep 18, 2021
In this article I will be talking about supply and demand.
What is supply and demand? Supply and demand is the relationship between the amount of the item and the price of it. Supply is the amount of a service or item produced at a certain price. Demand is the amount of service or item consumed at a certain price. Now let's put them together, when you put them together it makes a market. For example let's use bananas, when price is to high there is more bananas then the people who want to buy them, this is called a surplus. When the price is too low, there are not enough bananas to sell to the people want to buy them, this is called a shortage. There is only one price where the quantity that buyers want to buy is equal to the quantity that sellers want to sell. The price is called the equilibrium price and the quantity is called the equilibrium quantity.
Why is supply and demand important? One of the reasons is because economics is really important and Supply and demand is a huge part of economics. Another reason is that if you are running a business you have to know about supply and demand in order to find the equilibrium price and quantity. Thank you for reading my article on supply and demand. If you are interested in economics check out this article wrote by Sumay called Economic Systems and Macroeconomics.