Supply and Demand Dynamics

Supply and demand are fundamental economic principles that influence prices and availability of goods. Demand refers to how much consumers want a product, increasing when prices are lower and decreasing when prices rise. Supply is the quantity producers are willing to offer, increasing when prices are higher and decreasing when prices fall. When demand exceeds supply, prices tend to rise, encouraging producers to make more. Conversely, when supply exceeds demand, prices typically fall, encouraging consumers to buy more. The interaction between supply and demand helps determine the market equilibrium, balancing availability and cost.