What is the difference between supply and demand?
Supply and demand work together to determine the price of a good or service, but they are not the same thing.
Supply refers to how much of a product producers are willing to produce at a given sale price. When prices are high, producers want to make more of the product (all other things being equal) because they make more money when the price is high.
Demand refers to how much of a product consumers are willing and able to buy at a given price. When prices are high, consumers don’t buy as much (all other things being equal) because they don’t want to spend so much money.
Supply and Demand are two terms used for the production and consumption in an economy.
Supply is the term used for the production i.e., the amount of goods manufactured and supplied at an specific price to the consumers.
Demand is the term used for consumption, i.e., the amount of goods desired by consumers at an specific price.