Oct 23, 2025

Supply & Demand

• Supply and Demand is a basic economic concept that explains how prices are set in a market.

Demand = How much people want a product or service.

Supply = How much of that product or service is available.

Price is what balances these two!

How do I remember it?

• When demand goes up and supply stays the same → prices rise.

• When supply goes up and demand stays the same → prices fall.

Real world example

• When the PlayStation 5 launched:

Everyone wanted one! (high demand)

Sony couldn’t make enough (low supply)

Result: Prices went way up, some even resold for double!

Later, when more were available:

Supply increased and Prices dropped to down!