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.

TS
Answered by Thevinth S. Economics tutor

2587 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Describe the long run aggregate supply curve.


Between 2010 and 2015 the average price of tea in the UK increased from £7.20 per kilo to £8.48 per kilo. Over the same period the quantity of tea purchased fell from 97 million kilos to 76 million kilos. Find the price elasticity of demand


Describe the impact of a close competitor lowering the price for their good has on the price and output of a firm, use a demand-supply diagram to help explain your answer.


How much do I need to write for the long answer questions/essays at the end of the paper?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning