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
Answered by Gemma E. Business Studies tutor

1592 Views

See similar Business Studies GCSE tutors

Related Business Studies GCSE answers

All answers ▸

How can I achieve full marks in a long answer question?


Explain the Marketing Mix


The external environment in which businesses operate can have a significant effect on their success. To what extent do you think that the external environments in markets are favorable for businesses at the moment? Justify your answer with reference to ex


What is the difference between a private limited company and a public limited company?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences