Supply and demand is a fundamental concept in economics that refers to the relationship between the availability of a product or service (supply) and the desire or need for that product or service (demand).
When supply exceeds demand, prices tend to go down, as sellers need to lower prices to attract buyers. Conversely, when demand exceeds supply, prices tend to go up, as buyers compete for a limited supply of goods or services.
The interaction of supply and demand is what determines market prices for goods and services, as well as the quantity of those goods and services that are produced and consumed. Understanding supply and demand dynamics is important for businesses and individuals who are involved in buying and selling goods or services, as it can help them make informed decisions about pricing, production, and marketing.
