What is demand and supply in Economics?

Demand and supply is a model used in economics to determine the equilibrium price and quantity in specific market.The equilibrium price and quantity is given by the intersection between the demand curve and supply curve.This is shown in a diagram where, for convention, the y axis is price and x axis is quantity.In particular, the demand curve shows a negative correlation between price and quantity. This means that an increase in price will lead to a decrease in quantity demanded as the product becomes more expensive.On the other hand the supply curve shows a positive correlation between price and quantity. If price goes up, quantity supplied will increase as firms find it more profitable to produce this product.

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Answered by Thevinth S. Economics tutor

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