ECONOMICS DEMAND AND SUPPLY

ECONOMICS - The theories, principles and models that deal with how the market process works. It attempts to explain how wealth is created and distribution in communities, how people allocate resources that are scare and have many alternative uses and other such matters that arise in dealing with human wants and their satisfaction.
DEMAND- A claim for a sum of money as due, necessary, or required.
(1) Desire for certain good or service support by the capacity to purchase it.
(2)The aggregate quantity of a product or service estimated to be bought at a particular price.
LAW- An assertion of a legal right, such as to a seek a compensation or relief.
SUPPLY - The total amount of a product available for purchase any specified price.
Supply determined by : (1) Price: products will try to obtain the highest possible price whereas the buyers will try to pay the lowest possible price both settling at the equilibrium price where supply equals demand. (2)Cost of inputs :lower the inputs price the higher the profit at a price level and more products will be offered at that price. (3)Price of other goods :lower prices of competing good will reduce the price and the supplier may switch to switch more profitable products thus reducing the supply.