Supply and Demand

Supply and demand form the most fundamental concepts of economics. Supply means how many of a certain item are available. Demand means how much people want it. Both have an effect on price. Supply refers to the varying amounts of a good that producers will supply at different prices; in general, a higher price yields a greater supply. Demand refers to the quantity of a good that is demanded by consumers at any given price. According to the law of demand, demand decreases as the price rises.