Demand and Supply
Demand
Demand is the quantity of a good or service that consumers are willing and able to buy at different prices over a given period.
Law of Demand: As the price increases, demand decreases. As the price decreases, demand increases (assuming other factors remain constant).
Factors affecting demand:
Price of the product
Consumer income
Tastes and preferences
Prices of related goods
Population
Expectations about future prices
Supply
Supply is the quantity of a good or service that producers are willing and able to sell at different prices over a given period.
Law of Supply: As the price increases, supply increases. As the price decreases, supply decreases (assuming other factors remain constant).
Factors affecting supply:
Price of the product
Cost of production
Technology
Number of sellers
Government taxes and subsidies
Natural conditions