Economic's Blog: Demand & Supply

The Power of Demand & Supply

Demand & Supply defined as an economic model of price determination in a market. It concludes that in a competitive market, the unit for goods will vary it settles at a point where the quantity demanded by consumers will equal to the quantity supplied by producers. It results in an economic equilibrium for price and quantity of a product. The world can have many different many meanings when it come to demands, but demand is simply the various during the period of times. This definition has lead economists to formulate a law that would be able to envelop the basic behaviors of an economy in regards to the price of products, states that as the price of a product falls, the ceteris paribus being equaled, the quantity demanded will increases, include vice-versa. It is very important to note that this rule can be shown as tabular representation such as supply schedule, or graphical representation such as demand curve, which provide an excellent visuals understanding the inverse relationship between the price of a product and the quantity that is wanted by the consumers per unit of time in a given economy. The demand curve represents the entire demand for a product, whereas a point on the curve represents the quantity of demanded of the goods at one specific price. To illustrate this difference, it can be shown that a change in price of a product will results a change in a point along the curve and the quantity demanded.