Demand vs. Supply: Know the Difference
By Shumaila Saeed || Published on December 28, 2023
Demand refers to how much of a product or service is desired by buyers, while supply represents how much the market can offer.
Key Differences
Demand in economics is the consumer's desire and willingness to pay a price for a specific good or service, holding all else equal. Conversely, supply represents the total amount of a particular good or service available to consumers at a given price level. While demand captures the consumer's perspective, supply reflects the producer's standpoint.
Shumaila Saeed
Dec 28, 2023
Demand is not merely about the desire for a product; it also encompasses the purchasing power to buy it. In contrast, supply is not just the availability of a product; it includes the willingness and ability of producers to sell it at a certain price. Demand is influenced by factors like income, taste, and price of related goods, while supply is affected by costs of production, technology, and expectations.
Shumaila Saeed
Dec 28, 2023
Demand is sensitive to price changes; typically, a higher price leads to a lower quantity demanded. In supply, the relationship with price is direct; a higher price usually motivates an increase in supply. Demand curves slope downwards, reflecting this inverse relationship with price, whereas supply curves slope upwards, indicating a direct relationship with price.
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Dec 28, 2023
Demand can fluctuate rapidly based on consumer preferences, trends, and external economic factors. Supply, on the other hand, might be slower to respond due to production, labor, and resource constraints. While demand can change with shifts in consumer preferences, supply is more dependent on raw material availability and production capacity.
Shumaila Saeed
Dec 28, 2023
The equilibrium in a market is determined by the intersection of demand and supply, signifying the price and quantity agreed upon by consumers and producers. The concept of demand encapsulates the consumer's perspective of value and willingness to pay, while supply represents the producer's costs and pricing strategy.
Shumaila Saeed
Dec 28, 2023
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Comparison Chart
Definition
Consumer's desire and ability to purchase a product
Producer's willingness to sell a product at a certain price
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Dec 28, 2023
Price Relationship
Inversely related (higher price, lower demand)
Directly related (higher price, higher supply)
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Dec 28, 2023
Influencing Factors
Consumer income, tastes, and price of related goods
Production cost, technology, and resource availability
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Dec 28, 2023
Market Impact
Determines the quantity of a product consumers are willing to buy
Determines the quantity of a product available for sale
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Dec 28, 2023
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Demand and Supply Definitions
Demand
Consumer's desire to purchase goods or services at a given price.
The demand for electric cars has increased due to environmental concerns.
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Dec 15, 2023
Supply
The willingness of sellers to provide a certain quantity of a good at a given price.
The supply of fresh vegetables fluctuates with seasonal changes.
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Dec 15, 2023
Demand
The willingness of consumers to pay for a particular item.
There's a growing demand for organic produce in urban areas.
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Dec 15, 2023
Supply
The provision of goods or services to meet market demand.
Manufacturers ramped up the supply of masks during the pandemic.
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Dec 15, 2023
Demand
A market's requirement for a specific product.
The demand for smartphones has surpassed that of traditional mobile phones.
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Dec 15, 2023
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Supply
The availability of a commodity in the market.
The supply of water is critical in arid regions.
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Dec 15, 2023
Demand
To ask for urgently or peremptorily
Demand an investigation into the murder.
Demanding that he leave immediately.
Demanded to speak to the manager.
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Dec 13, 2023
Supply
To provide something necessary or desired to; furnish or equip
Supplied the players with uniforms.
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Dec 13, 2023
Demand
To ask to be informed of
Demanded an explanation for the interruption.
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Dec 13, 2023
Supply
To have as a necessary or desirable feature
A crime scene that supplied valuable evidence.
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Dec 13, 2023
Demand
To require as useful, just, proper, or necessary; call for
A gem that demands a fine setting.
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Dec 13, 2023
Demand
To ask that (something) be done in accordance with a legal requirement.
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Dec 13, 2023
Supply
An amount available or sufficient for a given use; stock
Our supply of milk is low.
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Dec 13, 2023
Supply
Often supplies Materials or provisions stored and dispensed when needed.
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Dec 13, 2023
Supply
(Economics) The amount of a commodity available for meeting a demand or for purchase at a given price.
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Dec 13, 2023
Demand
An urgent requirement or need
The heavy demands of her job.
The emotional demands of his marriage.
An increased oxygen demand.
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Dec 13, 2023
Supply
(transitive) To provide (something), to make (something) available for use.
To supply money for the war
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Dec 13, 2023
Supply
(transitive) To furnish or equip with.
To supply a furnace with fuel; to supply soldiers with ammunition
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Dec 13, 2023
Demand
(Economics) The desire for goods or services in an economy, measured as the amount people are ready to buy at a given price
Supply should rise to meet demand.
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Dec 13, 2023
Supply
(transitive) To fill up, or keep full.
Rivers are supplied by smaller streams.
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Dec 13, 2023
Demand
A request that some act be done or payment made in accordance with a legal requirement.
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Dec 13, 2023
Demand
The desire to purchase goods and services.
Prices usually go up when demand exceeds supply.
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Dec 13, 2023
Supply
(transitive) To fill temporarily; to serve as substitute for another in, as a vacant place or office; to occupy; to have possession of.
To supply a pulpit
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Dec 13, 2023
Demand
(economics) The amount of a good or service that consumers are willing to buy at a particular price.
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Dec 13, 2023
Demand
A forceful claim for something.
Modern society is responding to women's demands for equality.
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Dec 13, 2023
Supply
(countable) An amount of something supplied.
A supply of good drinking water is essential.
She said, "China has always had a freshwater supply problem with 20 percent of the world’s population but only 7 percent of its freshwater". File:She said, “China has always had a freshwater supply problem.ogg
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Dec 13, 2023
Demand
A requirement.
His job makes many demands on his time.
There is a demand for voluntary health workers in the poorer parts of Africa and Asia.
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Dec 13, 2023
Demand
An urgent request.
She couldn't ignore the newborn baby's demands for attention.
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Dec 13, 2023
Supply
An amount of money provided, as by Parliament or Congress, to meet the annual national expenditures.
To vote supplies
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Dec 13, 2023
Supply
Somebody, such as a teacher or clergyman, who temporarily fills the place of another; a substitute.
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Dec 13, 2023
Demand
(electricity supply) More precisely peak demand or peak load, a measure of the maximum power load of a utility's customer over a short period of time; the power load integrated over a specified time interval.
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Dec 13, 2023
Supply
To fill up, or keep full; to furnish with what is wanted; to afford, or furnish with, a sufficiency; as, rivers are supplied by smaller streams; an aqueduct supplies an artificial lake; - often followed by with before the thing furnished; as, to supply a furnace with fuel; to supply soldiers with ammunition.
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Dec 13, 2023
Demand
To claim a right to something.
The bank is demanding the mortgage payment.
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Dec 13, 2023
Supply
To serve instead of; to take the place of.
Burning ships the banished sun supply.
The sun was set, and Vesper, to supplyHis absent beams, had lighted up the sky.
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Dec 13, 2023
Demand
To ask forcefully for information.
I demand an immediate explanation.
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Dec 13, 2023
Supply
To fill temporarily; to serve as substitute for another in, as a vacant place or office; to occupy; to have possession of; as, to supply a pulpit.
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Dec 13, 2023
Supply
To give; to bring or furnish; to provide; as, to supply money for the war.
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Dec 13, 2023
Demand
To ask or call for with authority; to claim or seek from, as by authority or right; to claim, as something due; to call for urgently or peremptorily; as, to demand a debt; to demand obedience.
This, in our foresaid holy father's name,Pope Innocent, I do demand of thee.
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Dec 13, 2023
Demand
To inquire authoritatively or earnestly; to ask, esp. in a peremptory manner; to question.
I did demand what news from Shrewsbury.
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Dec 13, 2023
Demand
To require as necessary or useful; to be in urgent need of; hence, to call for; as, the case demands care.
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Dec 13, 2023
Supply
The food, and the like, which meets the daily necessities of an army or other large body of men; store; - used chiefly in the plural; as, the army was discontented for lack of supplies.
Shumaila Saeed
Dec 13, 2023
Supply
An amount of money provided, as by Parliament or Congress, to meet the annual national expenditures; generally in the plural; as, to vote supplies.
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Dec 13, 2023
Demand
To make a demand; to inquire.
The soldiers likewise demanded of him, saying, And what shall we do?
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Dec 13, 2023
Supply
A person who fills a place for a time; one who supplies the place of another; a substitute; esp., a clergyman who supplies a vacant pulpit.
Shumaila Saeed
Dec 13, 2023
Demand
The act of demanding; an asking with authority; a peremptory urging of a claim; a claiming or challenging as due; requisition; as, the demand of a creditor; a note payable on demand.
The demand [is] by the word of the holy ones.
He that has confidence to turn his wishes into demands will be but a little way from thinking he ought to obtain them.
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Dec 13, 2023
Supply
Serving to contain, deliver, or regulate a supply of anything; as, a supply tank or valve.
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Dec 13, 2023
Demand
A diligent seeking or search; manifested want; desire to possess; request; as, a demand for certain goods; a person's company is in great demand.
In 1678 came forth a second edition [Pilgrim's Progress] with additions; and then the demand became immense.
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Dec 13, 2023
Demand
That which one demands or has a right to demand; thing claimed as due; claim; as, demands on an estate.
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Dec 13, 2023
Supply
Provide or furnish with;
We provided the room with an electrical heater
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Dec 13, 2023
Demand
The ability and desire to purchase goods and services;
The automobile reduced the demand for buggywhips
The demand exceeded the supply
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Dec 13, 2023
Supply
Circulate or distribute or equip with;
Issue a new uniform to the children
Supply blankets for the beds
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Dec 13, 2023
Demand
An urgent or peremptory request;
His demands for attention were unceasing
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Dec 13, 2023
Supply
Provide what is desired or needed, especially support, food or sustenance;
The hostess provided lunch for all the guests
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Dec 13, 2023
Demand
A condition requiring relief;
She satisfied his need for affection
God has no need of men to accomplish His work
There is a demand for jobs
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Dec 13, 2023
Supply
The total amount of a product that is available for purchase.
The supply of solar panels is increasing as technology improves.
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Dec 15, 2023
Demand
Required activity;
The requirements of his work affected his health
There were many demands on his time
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Dec 13, 2023
Supply
The amount of a product that producers are ready to sell.
The supply of luxury cars is limited to maintain exclusivity.
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Dec 15, 2023
Demand
Request urgently and forcefully;
The victim's family is demanding compensation
The boss demanded that he be fired immediately
She demanded to see the manager
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Dec 13, 2023
Demand
Require as useful, just, or proper;
It takes nerve to do what she did
Success usually requires hard work
This job asks a lot of patience and skill
This position demands a lot of personal sacrifice
This dinner calls for a spectacular dessert
This intervention does not postulates a patient's consent
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Dec 13, 2023
Demand
The quantity of a product that buyers are ready to buy.
The holiday season sees a high demand for toys.
Shumaila Saeed
Dec 15, 2023
Demand
The consumer's need for a product or service.
In cold regions, the demand for heating systems is consistently high.
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Dec 15, 2023
Repeatedly Asked Queries
What is the law of demand?
The law of demand states that, all else being equal, as the price of a product increases, demand for it decreases.
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Dec 28, 2023
Can supply be independent of demand?
While supply can be influenced by demand, it can also be affected by other factors like production capacity.
Shumaila Saeed
Dec 28, 2023
What is demand?
Demand is the consumer's desire and ability to purchase a product or service.
Shumaila Saeed
Dec 28, 2023
What factors influence demand?
Income levels, consumer preferences, prices of related goods, and market trends.
Shumaila Saeed
Dec 28, 2023
What is supply?
Supply is the total amount of a good or service that is available for purchase.
Shumaila Saeed
Dec 28, 2023
What factors influence supply?
Production costs, technology, market competition, and resource availability.
Shumaila Saeed
Dec 28, 2023
What is the law of supply?
The law of supply states that, all else being equal, an increase in price results in an increase in the quantity supplied.
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Dec 28, 2023
How do demand and supply determine price?
Market equilibrium, where demand and supply curves intersect, determines the price.
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Dec 28, 2023
How does price affect demand?
Generally, an increase in price leads to a decrease in demand.
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Dec 28, 2023
Can demand be measured?
Yes, demand can be quantified by the quantity of goods purchased at different price levels.
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Dec 28, 2023
How does price affect supply?
Generally, an increase in price leads to an increase in supply.
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Dec 28, 2023
What causes a shift in supply?
Factors like technological advances or changes in production costs.
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Dec 28, 2023
What is an example of a shift in demand?
A new health study can shift demand for a food product if it's deemed healthier.
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Dec 28, 2023
What is an example of inelastic supply?
Supply of land is often inelastic as it cannot be increased.
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Dec 28, 2023
Can government policies affect demand and supply?
Yes, through regulations, taxes, subsidies, and other policy tools.
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Dec 28, 2023
How do seasonal changes affect demand and supply?
Seasonal changes can significantly impact the demand and supply of certain products, like seasonal fruits or holiday-specific goods.
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Dec 28, 2023
Can demand ever be perfectly inelastic?
Yes, in rare cases for essential goods where quantity demanded does not change regardless of price.
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Dec 28, 2023
What is a surplus in the context of supply?
A surplus occurs when supply exceeds demand, often leading to lower prices.
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Dec 28, 2023
What happens when demand exceeds supply?
It often leads to a rise in prices and potential shortages.
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Dec 28, 2023
How do expectations affect demand and supply?
Future expectations of prices or product availability can affect current demand and supply.
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Dec 28, 2023
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About Author
Written by
Shumaila SaeedShumaila Saeed, an expert content creator with 6 years of experience, specializes in distilling complex topics into easily digestible comparisons, shining a light on the nuances that both inform and educate readers with clarity and accuracy.
Shumaila Saeed
Hifza Nasir
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