What is the difference between Supply and Demand? How do they work together?

Supply and Demand are two economic principles that describe how a good or service is consumed and supplied according to price. Demand refers to the ability of people to purchase a good at a given time and a given price, this usually decreases when price increases. For example you're way more likely to buy an ice cream if its 50p over £5.50? Thats essentially the principle, that people will buy more of a good if it is lower in price! There is an inverse relationship However, this is the opposite of supply, I am way more likely to supply more of a product for a higher price. For example if I sell ice creams, I would rather sell more for £5 than for £2, because i want to make money! The point at which supply and demand meet is an equilibrium price!

GE

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