What Is the Concept of Demand and Supply?

Prices of goods in the market are defined by the demand of the goods. The whole process begins with consumers demanding for goods. When the demand is high, the suppliers can set high prices for the goods. This, in turn, fuels producers to make more goods to earn profits. However, if the prices are too high, only a few customers may buy the goods. When supply and demand reach the same level, the market is said to be at equilibrium.