I do not understand how demand and supply work, can you please explain it to me?

Economics is the social science that studies the production, distribution and the consumption of goods and services. To explain this concept, we use the model of demand and supply, which is shown in a graph. 

On one side we have the demand. It englobes a specific market/amount of people which have a demand for a specific good or service. Let's say you like chocolate. You have to buy it and are ready to spend 1.50£ for a Cadburry bar. That creates demand for one person. But you are not the only person that likes chocolate, hence other people are ready to spend different amounts for different types of chocolate. This creates the demand for an entire industry, the chocolate industry. 

On the other side, you have the supply, the ability of businesses to supply the chocolate. Hence how all the different factories work so to supply for what is demanded. Hence, if suddenly a lot of people start wanting chocolate, factories will have to adapt to create more so there is no shortage and everyone can enjoy it. 

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Answered by Anya M. Economics tutor

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