Supply and demand
ECONOMICS
WRITTEN BY:?
The Editors of Encyclopaedia Britannica
LAST UPDATED:?Dec 17, 2019?See Article History
Alternative Titles:?consumer demand, supply
?ARTICLE CONTENTS
Supply and demand, in?economics, relationship between the quantity of a commodity that producers 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.
