When an economist speaks of demand economics, he is generally referring to a demand curve. A demand curve tracks a service or good in relation to its price. The most commonly known concepts in demand economics are the laws of supply and demand.Continue Reading
The law of demand revolves around the idea that when the price of something rises, the demand for the product falls. Conversely, if the price of a product decreases, the public demand for the product increases. Illustrated in a graph, a demand curve has a downward slope due to the relationship between product demand and the price of the product.
The law of supply is closely tied to the law of demand. This law shows the products that are available for purchase. A graphic illustration of this law has an upward slope in comparison to the downward slope of the law of demand, as it shows the relationship between a higher price and a higher quantity of product available.
An economy is said to be in an equal state, or in equilibrium, when the demand and the supply of a product are equal. Goods are produced at an equal rate to goods being purchased. Equilibrium in an economy is only a theory, however, as the prices and quantities of products constantly change.Learn more about Economics