Skip to main content
Social Sci LibreTexts

3: Introducing Supply and Demand

  • Page ID
    3448
    • 3.1: Demand
      In general, the law of demand states that the quantity demanded and the price of a good or service is inversely related, other things remaining constant.
    • 3.2: Supply
      The law of supply states that there is a positive relationship between the quantity that suppliers are willing to sell and the price level.
    • 3.3: Market Equilibrium
      When a market achieves perfect equilibrium there is no excess supply or demand, which theoretically results in a market clearing.
    • 3.4: Government Intervention and Disequilibrium
      Governments intervene in markets when they inefficiently allocate resources.