Introduction:

Demand and supply are the core concepts in economics. They are also the fundamentals of finance. Demand and supply measure the price customers are willing to buy at a certain quantity, and the price producers (i.e. companies) are willing to sell at a given quantity. The equilibrium of demand and supply reflects the dealing quantity and price.

Demand

You can understand demand as the price customers are willing to pay for a given quantity. According to the law of demand, as price increases, customers will purchase fewer quantities.

Supply

Supply reflects the price producers (sellers) are willing to sell at the given quantity. According to the law of supply, producers are willing to supply more given a higher price.