When learning about supply and demand, there are two important rules to keep in mind:
Law of Demand: When prices go up, people usually want to buy less. It makes sense—who wants to pay more for something, right?
Law of Supply: On the other hand, when prices go up, sellers are happy to make and sell more. Higher prices mean they can make more money, which is a great reason to produce more.
If we look at a graph, we can see this clearly. The demand line goes downwards, while the supply line goes upwards. The point where these two lines meet is called market equilibrium. This is a good place for both buyers and sellers!
When learning about supply and demand, there are two important rules to keep in mind:
Law of Demand: When prices go up, people usually want to buy less. It makes sense—who wants to pay more for something, right?
Law of Supply: On the other hand, when prices go up, sellers are happy to make and sell more. Higher prices mean they can make more money, which is a great reason to produce more.
If we look at a graph, we can see this clearly. The demand line goes downwards, while the supply line goes upwards. The point where these two lines meet is called market equilibrium. This is a good place for both buyers and sellers!