In economics, relationship between the quantity of a commodity that produces wish to sell at various prices and the quantity that consumers wish to buy. It is the main model of price determination used in economic theory. The price of a commodity is determined by the interaction of supply and demand in a market. The resulting price is referred to as the equilibrium price and represents an agreement between producers and consumers of the good. In equilibrium the quantity of a good supplied by producers equals the quantity demanded by consumers.
The quantity of a commodity demanded depends on the price of that commodity and potentially on many other factors, such as the prices of other commodities the incomes and the preferences of consumer and seasonal effects. In basic economic analysis, all factors except the price of commodity are offen held constant, the analysis then involves the examining the relationship between various price levels and the maximum quantity that would potentially be purchased by consumers at each of those prices. The price quantity combinations may he plotted on a curve known as a Demand curve.
The quantity of a commodity demanded depends on the price of that commodity and potentially on many other factors, such as the prices of other commodities the incomes and the preferences of consumer and seasonal effects. In basic economic analysis, all factors except the price of commodity are offen held constant, the analysis then involves the examining the relationship between various price levels and the maximum quantity that would potentially be purchased by consumers at each of those prices. The price quantity combinations may he plotted on a curve known as a Demand curve.
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