Supply and Demand

The law of supply and demand describes how changes in the price of a resource, commodity, or product affect its supply and demand.

Supply rises as demand decreases and the price increases.

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Demand

The demand represents the willingness of the people to buy a certain product. It represents the curve on the graph itself. Demand quantity, on the other hand, is a specific point on the curve.

As price rises, people will be put off from buying the product, lowering the demand.

Things that affect demand

• Population demographics
• Population preference
• Population income
• Price $\Delta$ between a product and its substitutes/alternatives
• Price $\Delta$ of complementary products
• Market expectation

Things that affect labor demand

• Demand for output
• Education and training
• Technology
• Number of companies