Demand refers to how much of a product is desired by buyers, and the law of demand states that demand decreases as price increases. Supply represents how much the market can offer, and the law of supply shows that supply increases as price increases. When supply and demand are equal, the economy reaches equilibrium. If supply exceeds demand, a surplus occurs, and if demand exceeds supply, a shortage occurs.

1. Topic:- Demand & Supply
Presentation by MuhammadAdeel
Insc: Sir Ali Akber

2. Demand & The Law of Demand
• Refers to how much (quantity) of a product or service is
desired by buyers.
• The law of demand states that, if all other factors
remain equal, the higher the price of a good, the less
people will demand that good.

3. Demand GraphPrice
Quantity
10
20
30
40
10203040
0

5. Supply & law of supply
• Supply represents how much the market can offer.The quantity
supplied refers to the amount of a certain good producers are
willing to supply.
• the law of supply demonstrates the quantities that will be sold at a
certain price. But unlike the law of demand, the supply relationship
shows an upward slope.This means that the higher the price, the
higher the quantity supplied.

6. Supply GraphPrice
Quantity
10
20
30
40
1020
3040

8. 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.

10. Surplus
• That is quantity supplied is greater than quantity
demanded.
• In this situation, some producers won't be able to sell all
their goods. This will induce them to lower their price to
make their product more appealing.

11. Shortage
• That is quantity demanded is greater than quantity
supplied.
• In this situation, consumers won't be able to buy as
much of a good as they would like. In response to the
demand of the consumers, producers will raise both the
price of their product and the quantity they are willing
to supply.