Define supply and demand and what factors affect them. What will be a

QUESTION

Define supply and demand and what factors affect them.

What will be an ideal response?

ANSWER

Supply is the quantity of goods and services available for purchase at a given time. Factors affecting supply include changes in prices of substitute products, changes in price expectations, changes in production costs, changes in technology, and changes in the number of competitors. Demand is the quantity of goods and services customers will buy at a given time and at various prices. Factors affecting the demand for goods include changes in customer preferences, increases in the number of potential buyers, the prices of related products, and the prices of substitute products.