Supply and demand is essentially the amount of raw materials, products, or services available, and the want or need of buyers for it - who are considered as factors in regulating the prices of the raw materials, products, or services. One aspect of supply and demand is the Law of Demand, which states that if all other factors remain constant, the higher the price of a product or service, the less people will demand the product or service. So, for example, if the price for an Iphone were to increase to $1000, the demand for Iphones would decrease - along with an increase in price, there would also be an increase in the opportunity cost. Opportunity cost is the loss of potential sales from other options, when one option is chosen. Another aspect of supply and demand is the Law of Supply, which states that the higher the price for a good or service, the higher the quantity supplied. Companies who produce these goods and services will supply more at a higher price, because selling the goods and services …show more content…
Supply and demand is possible due to businesses. Businesses that offer a good or service also offer jobs for consumers. When consumers are employed they have money, which means they are able to spend that money in the economy. So, if there is a high demand for several types of goods and services in a healthy, thriving economy, businesses are able to grow and create more jobs. This is an example of the ongoing cycle of supply and demand. However, the economy isn’t always positively affected. For example, if demand for parsley is really high, but the availability for parsley is lower than normal, consumer prices for food will increase. The increase in price will affect what and how much a consumer can buy. A consumer will have to spend more money on food, which in return gives the consumer less money to spend on other products. Therefore there will be less revenue coming in for other parts of the consumer