What term describes the relationship between how much is available and how much is wanted?

What term describes the relationship between how much is available and how much is wanted?

• A. Supply and demand
• B. Demand curve
• C. Supply curve
• D. Price mechanism

Answer: (A)

Supply and demand is the idea that links how much is available from producers with how much people want to buy. It shows how these two sides interact to set the market price and the quantity traded. When there’s plenty of supply or lower demand, prices tend to fall and more can be bought; when supply is tight or demand rises, prices go up and purchases adjust. The demand curve and the supply curve are just the graphs of how quantity demanded or supplied changes with price, while the price mechanism describes how those prices allocate resources. So the term describing the relationship between what’s available and what’s wanted is supply and demand.

Supply and demand is the idea that links how much is available from producers with how much people want to buy. It shows how these two sides interact to set the market price and the quantity traded. When there’s plenty of supply or lower demand, prices tend to fall and more can be bought; when supply is tight or demand rises, prices go up and purchases adjust. The demand curve and the supply curve are just the graphs of how quantity demanded or supplied changes with price, while the price mechanism describes how those prices allocate resources. So the term describing the relationship between what’s available and what’s wanted is supply and demand.