Supply+&+Demand



**supply and demand** is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the

quantity demanded by consumers (at current p rice) will equal the quantity supplied by producers (at

current price), resulting in an economic equilibrium for price and quantity.

The four basic laws of supply and demand are:
 * 1) If demand increases and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price.
 * 2) If demand decreases and supply remains unchanged, a surplus occurs, leading to a lower equilibrium price.
 * 3) If demand remains unchanged and supply increases, a surplus occurs, leading to a lower equilibrium price.
 * 4) If demand remains unchanged and supply decreases, a shortage occurs, leading to a higher equilibrium price.


 * ** The higher the price, the lower the quantity demanded . **
 * ** The higher the price, the higher the quantity supplied . **
 * ** Producers supply more at higher price because selling higher quantity at higher price increases revenue. **
 * ** Equilibrium : when supply and demand are equal, the economy is said to be equilibrium. **
 * **The allocation of goods is at the most efficient because the amount of goods being supplied is exactly the sane amount being demanded .**