Demand and Supply Basics
A compact framework for understanding price movement.
This is a test
Demand
Demand generally decreases as price rises, assuming other factors stay constant.
Supply
Supply generally increases as price rises, because higher prices can make production more attractive.
Equilibrium
The market-clearing price tends to sit near the point where demand and supply intersect. Shocks to either side can shift this balance.
My practical takeaway
In operations and planning, always identify whether a problem is demand-constrained, supply-constrained, or coordination-constrained.