SUPPLY

- It is the counterpart to demand. Demand is from the consumer's perspective while supply is from the producer's.

- In economics, it is defined as the producer's willingness and ability to supply a given good at various price points, holding all else constant.

LAW OF SUPPLY

- It is a fundamental principle of economic theory which states that, all else equal, an increase in price results in an increase in quantity supplied.

- There is a direct relationship between price and quantity: quantities respond in the same direction as price changes.

- This means that producers are willing to offer more products for sale on the market at higher prices by increasing production as a way of increasing profits.

DEMAND

- It is the utility for a good or service of an economic agent, relative to his/her income.

- This distinguishes "demand" from "quantity demanded", where demand is a listing or graphing of quantity demanded at each possible price.

- In contrast to demand, quantity demanded is the exact quantity demanded at a certain price.

- Changing the actual price will change the quantity demanded, but it will not change the demand, because demand is a listing of quantities that would be bought at various prices, not just the actual price.

LAW OF DEMAND

- In economics, the law of demand states that, all else being equal, as the price of a product increases, quantity demanded falls; likewise, as the price of a product decreases, quantity demanded increases.

- It means inverse relationship between price and quantity of demand.