Supply and Demand
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Beginner Level
Global
Microeconomics
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Definition
The fundamental economic model describing the relationship between the availability of a product and the desire for it.
Detailed Explanation
The law of demand states that quantity demanded decreases as price increases. The law of supply states that quantity supplied increases as price increases. Market equilibrium occurs where supply meets demand.
Example
When iPhone supply is limited during launch, high demand drives prices up in secondary markets.