What Do You Know About Demand And Supply?

Demand and Supply are two of the most important concepts in Economics. All pricing decisions in all the markets is done through the demand and supply mechanism.
Demand is economics terms is defined as the quantity demanded of any good or service is inversely proportional to the price of that good or service. When prices increase, quantity demanded by the consumers will always decrease because consumer's limited income and budget may not allow the consumer to buy expensive good. Therefore, it is disadvantageous for the consumer to buy at higher prices.
Similarly, Supply is the process of direct relationship between goods or services supplied to the price of good. As the prices of goods and services increase, the suppliers will find them at benefit to produce more so that they can sell at higher prices to earn more profit.
These two important concepts determine the prices in the market. Intersection of the supply and demand actually set the price. The Equilibrium price which is determined at the point where goods supplied is equal to the goods demanded in the market.
Any distortion in the equilibrium price determine the shortage or glut in the market. When prices at which the goods or services are supplied is higher than the prices at which goods or services demanded, there will be glut whereas when goods demanded are higher than the goods supplied, there will be shortage in the market.

In a good business situation, i like it that Demand is higher than Supply.
Example: In a computer business:
   Demand for computer in America is 20,000 in 2000.
   Supply is only 19,000 in the same year.
Then the business manufacturer uses this for the next year if they have the same ratio in years before 2007.
    Demand for computer in America is 20.000 in 2006.
    Supply is only 19.000 in the same year.
then for sure they will raise their manufacturing of computer for 2007, and may be more for 2009.
I hope you get it.