Advertisement:
You know you need life insurance, but how much and what kind? Get personalized answers from Nelsonomics creator Danny Nelson with a Life Insurance Blueprint.
Placeholder Lesson:
** This lesson is generated with AI assistance and approved by Danny Nelson. This lesson will communicate the essence of the topic for now until Danny can create a full lesson. **
Supply refers to the quantity of a good or service that producers are willing and able to offer for sale at various prices in a given market.
Demand, on the other hand, represents the quantity of that good or service that consumers are willing and able to purchase at different price levels.
The interaction between supply and demand determines the equilibrium price and quantity in a market, where the amount supplied equals the amount demanded.
According to the law of supply, as prices rise, producers typically increase the quantity supplied to maximize profits.
Conversely, the law of demand states that as prices increase, consumers usually reduce the quantity demanded due to decreased affordability.