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Case study: Demand and Supply Analysis, a brief preview
Willingness to have anything in exchange of money is called Demand. Normally, when price of a good rises, demand for it tends to decrease and vice-versa, other things remaining the same. But in case of a firm, it is quite opposite for normal goods and services. A firm goes to supply more as price of it rises and vice-versa, ceteris paribus. A consumer always responses to the price change of the good (s)he purchases, as a firms does regarding its production and supply of goods. Above discussed market forces Demand and Supply play important role to achieving equilibrium, i.e., a situation from where there is no tendency to move. Market equilibrium is achieved at the point where Demand and Supply are equal.
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