Supply and demand

Hello again! It’s good to be back and posting after a while. Today I would like to talk about supply and demand. It is a basic economic concept and while I am not an expert in economics, I would like to share what I know about it. Let’s start with talking about the meaning of this.

Supply refers to the quantity of a certain good or service. A good is a product that is made for humans to have a possible use for. It serves for wants or needs. For example, a banana is a good, and a pencil is a good because they are something tangible that humans can have a possible use for and can buy and own. A service is something a person is willing to pay for to have. It is an act or work that someone or something does for you. For example, fixing leaks in your house or having a car wash is all a service because they are acts that someone or something is doing for the benefit of you or something you have. However, a service is intangible. Unlike a good, you can’t touch it physically. Similarly, you can’t save it for later use either. It is done at the request of it. These are goods and services.

Now, that was supply. Let’s talk about demand. Demand is the certain quantity of goods and services that consumes are willing to pay for. Who are consumers? Consumers are basically individuals who purchase goods or services for personal use and not for advertisements or commercial purposes. Demand is not just the desire for consumers to buy a certain product, but it is more of the desire to buy a good or service mixed with the ability to purchase a certain amount of it. Demand is usually thought of as the relationship between the price of a certain good or service and the certain quantity of that good or service that is purchased.

That was supply and demand. Believe it or not, they are related to each other. That’s crazy right?! The quantity of the good or service depends on the price of it. Let me break that down. Supply which is the quantity of a certain good or service depends on the price of that service or the demand which is the price that people are willing to pay for it. When the price people are willing to pay for a good or service increases, the amount of it that is produced or done is more. With the same logic, if the price people are willing to pay for a good or service decreases, the production decreases too.

This is the basic concept of supply and demand. Thank you for reading this post and I hope you enjoyed it. Have a good day and stay safe!