What is market demand and market supply?
The demand of all buyers and supply all sellers in a market for a good or service; found by adding together all individual demand or supply schedules.
Market demand is the quantity of a product or service that consumers are willing and able to purchase at a particular price, while market supply is the quantity of a product or service that producers are willing and able to supply to the market at a particular price.
Market demand and market supply are important concepts in economics because they help to determine the price and quantity of goods and services in a market economy. When the market demand for a product or service is high and the market supply is low, prices tend to rise. Conversely, when the market supply is high and the market demand is low, prices tend to fall.
The interaction between market demand and market supply is shown on a graph known as a supply and demand curve. The upward sloping supply curve represents the quantity of a product that suppliers are willing to produce at each price point. The downward sloping demand curve represents the quantity of a product that consumers are willing to buy at each price point.
The point at which the supply and demand curves intersect is called the equilibrium point, where the quantity of the product supplied equals the quantity demanded at a particular price level. This equilibrium price and quantity determine the market clearing price and quantity for the product or service.
More Answers:
Mastering the importance of equilibrium price for businesses and marketsUnderstanding Economic Surpluses and Shortages: The Impact of Supply and Demand on Prices and Inventory Management.
Understanding Shortages in Social Science: Causes, Impacts, and Solutions