Supply and Demand

Supply and demand is an economic law that explains the relationship and interactions between the seller of a good or service and the buyer of that particular good or service.

The laws of supply and demand is the main model of price determination used in economics and seeks to outline the relationship between the quantity of a good the producer wishes to sell and the quantity demanded by the consumer. In simple terms, the higher the price of a good, the greater the level of supply (as more people are willing to sell at the higher price), but the lower the demand for the product (as fewer people are willing to pay the higher price).

This is defined in the supply and demand diagram on the left...