SUPPLY AND DEMAND Definition

Bookmark and Share

SUPPLY AND DEMAND, in economic theory, the law of supply and demand is considered one of the fundamental principles governing an economy. It is described as the state where as supply increases the price will tend to drop or vice versa, and as demand increases the price will tend to increase or vice versa. Basically this is a principle that most people intuitively grasp regarding the relationship of goods and services against the demand for those goods and services.

When supply and demand are in balance, the economy is said to be in equilibrium between price and quantity. 

Learn new Accounting Terms

PRICE EARNING RATIO see PRICE EARNINGS MULTIPLE.

DEFERRAL see DEFERRED.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.