Supply is how much of something is available.

For example, if you have 9 baseball

cards, then your supply of baseball cards is 9. If you have 6 apples, then your
supply of apples is 6.
Demand is how much of something people want. It sounds a little bit harder to
measure, but it really isn't. To measure demand, we can use a very simple
numbering system, just like the supply one. If 8 people want baseball cards, then
we can say that the demand for baseball cards is 8. If 6 people want apples, then
we can say that the demand for apples is 6.
Demand curve: The chart below shows that the curve is a downward slope.
P1=75,p2=50,p3=25 ,,Q1=25,,,q2=50,q3=75,,

A, B and C are points on the demand curve. Each point on the curve reflects a direct
correlation between quantity demanded (Q) and price (P). So, at point A, the
quantity demanded will be Q1 and the price will be P1, and so on. The demand
relationship curve illustrates the negative relationship between price and quantity
demanded. The higher the price of a good the lower the quantity demanded (A),
and the lower the price, the more the good will be in demand (C).
Supply curve: Producers supply more at a higher price because selling a higher
quantity at a higher price increases revenue.
P1=25,p2=50,p3=75,,,,,q1=25,,q2=50,,q3=75

A, B and C are points on the supply curve. Each point on the curve reflects a direct
correlation between quantity supplied (Q) and price (P). At point B, the quantity
supplied will be Q2 and the price will be P2, and so on.

Equilibrium
When supply and demand are equal (i.e. when the supply function and demand
function intersect) the economy is said to be at equilibrium. At this point, the
allocation of goods is at its most efficient because the amount of goods being
supplied is exactly the same as the amount of goods being demanded. Thus,
everyone (individuals, firms, or countries) is satisfied with the current economic
condition. At the given price, suppliers are selling all the goods that they have
produced and consumers are getting all the goods that they are demanding.

As you can see on the chart, equilibrium occurs at the

intersection of the demand and supply curve, which indicates no allocative
inefficiency. At this point, the price of the goods will be P* and the quantity will be
Q*. These figures are referred to as equilibrium price and quantity.
Shifts vs. Movement
For economics, the "movements" and "shifts" in relation to the supply and demand
curves represent very different market phenomena:

1. Movements
A movement refers to a change along a curve. On the demand curve, a movement
denotes a change in both price and quantity demanded from one point to another
on the curve. The movement implies that the demand relationship remains
consistent. Therefore, a movement along the demand curve will occur when the
price of the good changes and the quantity demanded changes in accordance to the
original demand relationship. In other words, a movement occurs when a change in
the quantity demanded is caused only by a change in price, and vice versa.

Like a movement along the demand curve, a movement along the supply curve
means that the supply relationship remains consistent. Therefore, a movement
along the supply curve will occur when the price of the good changes and the
quantity supplied changes in accordance to the original supply relationship. In other
words, a movement occurs when a change in quantity supplied is caused only by a
change in price, and vice versa.

2. Shifts
A shift in a demand or supply curve occurs when a good's quantity demanded or
supplied changes even though price remains the same. For instance, if the price for
a bottle of beer was $2 and the quantity of beer demanded increased from Q1 to
Q2, then there would be a shift in the demand for beer. Shifts in the demand curve
imply that the original demand relationship has changed, meaning that quantity
demand is affected by a factor other than price. A shift in the demand relationship
would occur if, for instance, beer suddenly became the only type of alcohol
available for consumption.

Conversely, if the price for a bottle of beer was $2 and the quantity supplied
decreased from Q1 to Q2, then there would be a shift in the supply of beer. Like a
shift in the demand curve, a shift in the supply curve implies that the original supply
curve has changed, meaning that the quantity supplied is effected by a factor other
than price. A shift in the supply curve would occur if, for instance, a natural disaster
caused a mass shortage of hops; beer manufacturers would be forced to supply less
beer for the same price.

Inflation is defined as a sustained increase in the general level of prices for goods
and services.
Aggregate supply is defined as the total amount of goods and services (real
output) produced and supplied by an economys firms over a period of time.
demand schedule: A table which contains values for the price of a good and the
quantity that would be demanded at that price. If the data from the table is charted,
it is known as a demand curve.

supply schedule: A table which contains values for the price of a good and the
quantity that would be supplied at that price. If the data from the table is charted, it
is known as a supply curve. A supply schedule is a table that shows the relationship
between the price of a good and the quantity supplied.

supply curve, in economics, graphic representation of the relationship between

product price and quantity of product that a seller is willing and able to supply.

Demand curve,in economics, a graphic representation of the relationship between

product price and the quantity of the product demanded.
Factors affecting demand:
1. Income of the consumer:
A consumers demand is influenced by the size of his income. With increase in the
level of income, there is increase in the demand for goods and services.
2. Price of the commodity:
Price is a very important factor, which influences demand for the commodity.
Generally, demand for the commodity expands when its price falls, in the same way
if the price increases, demand for the commodity contracts. It should be noted that
it might not happen, if other things do not remain constant.
3. Changes in taste:
Demand for a commodity may change due to changes in tastes .For example ,
people develop a taste for coffee. there is then a decrease in the demand for tea.
4. Climate and weather conditions: the climate and weather conditions have an
important bearing on the demand of a commodity. For instance ,the consumers
demand for woolen clothes increases in winter and decreases in summer.
5. Improvement in technology: As technology develops, it brings a change in our
demand pattern for goods. For example, old box cameras are replaced with digital
cameras.
6.Changes in a distributions of wealth: if an equal distribution of wealth is brought
about in a country, then there will be less demand for expensive luxuries goods.
there will be more demand for necessities and comfort items.
7. Size of population affects demand. With higher population more product will
be needed. All other things constant, demand is increased as population increases.
Factors affecting supply:
1) Price of the commodity: A rise in price will result in more of the commodity
being supplied to the market and vice versa.
2) Technological advancement: Improvement in technology results in
lowering of cost of production and more profits for the producer and thus
more supply of that commodity.
3) Input Prices: If the price of raw materials used in the production of a
product goes down, then Supply of that product will increase. If the price of
inputs increase used in the production of a product then Supply of that
product will decrease.
4) Government Policy
Government policies can have a significant impact on supply. For example: If
the government imposes a subsidy on the good, then S increases while a tax
on the good will have the opposite effect of decreasing S.

5) Numbers of sellers: more seller, more supply, fewer sellers, less supply.
6) Goals of firms: if the firms expect higher profits in the future, they will take
the risk and produce goods on large scale resulting in larger supply of the
commodity.
7) Improvement in the means of transport: the supply of a commodity may
also increase due to improvement in the means of communication and
transport . if the means of transport are cheap and fast, then supply of the
commodity can be increased at a short notice at lower prices.