Supply vs. Demand — What's the Difference?
By Tayyaba Rehman — Updated on September 30, 2023
"Supply" refers to the amount of a product available, while "Demand" signifies the desired quantity of that product by consumers.
Difference Between Supply and Demand
Table of Contents
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Key Differences
"Supply" characterizes the total amount of a specific product or service that is available to consumers. It can relate to the amount available at a specific price or the amount available across a range of prices if displayed on a graph. Conversely, "Demand" represents how much of a product or service is desired by buyers. It's the relationship between the price and the quantity demanded at that price.
"Supply" can be influenced by several factors, including the cost of production, the price of related products, and expectations of future prices. For instance, if producing a product becomes cheaper, a higher supply might be available. On the other hand, "Demand" can shift based on consumer preferences, income, and the price of substitute or complementary goods. For example, an increase in consumers' income might boost the demand for luxury goods.
In an economy, the law of "Supply" states that, holding all else constant, an increase in the price results in an increase in the quantity supplied. Sellers are more willing to produce and sell more at a higher price. In contrast, the law of "Demand" says that, all else being equal, an increase in the price results in a decrease in the quantity demanded. Buyers purchase less of an item if it's more expensive.
In equilibrium, the quantity of "Supply" matches the quantity of "Demand", ensuring market stability. If the supply exceeds demand, a surplus occurs, driving prices down. If the demand is greater than the supply, a shortage happens, pushing prices up.
Comparison Chart
Definition
Amount of a product available
Desired quantity of a product by consumers
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Factors influencing
Cost of production, price of related products, future price expectations
Consumer income, preferences, price of substitutes
Relationship with Price
Direct relationship (higher price can mean more supply)
Inverse relationship (higher price can mean less demand)
Result of Excess
Surplus, price drops
Shortage, price rises
Graphical Representation
Upward sloping curve
Downward sloping curve
Compare with Definitions
Supply
Supply is the total amount of a product or service available for purchase.
The supply of new smartphones couldn't meet the high demand.
Demand
Demand signifies how much of a product consumers wish to buy.
The demand for the new book exceeded all expectations.
Supply
Supply represents the willingness of sellers to produce and offer goods.
Due to high costs, the supply of handmade crafts is limited.
Demand
Demand can shift based on price, income, and preferences.
A celebrity endorsement suddenly increased the demand for a particular brand of shoes.
Supply
Supply encompasses both current availability and future production.
Companies store excess products to ensure a steady supply.
Demand
Demand indicates the market's appetite for a specific product.
The growing health-consciousness increased the demand for organic foods.
Supply
Supply directly correlates with the market's production capacity.
Increased factory efficiency doubled the supply of manufactured goods.
Demand
Demand often decreases as the price of a product rises.
The high ticket prices led to a decreased demand for the concert.
Supply
Supply can fluctuate based on production costs and external factors.
A drought decreased the supply of crops this year.
Demand
Demand captures the consumer's desire and ability to purchase.
Economic downturns can significantly reduce consumer demand.
Supply
To make available for use; provide
Does the hotel supply towels?.
Demand
In economics, demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given period of time. The relationship between price and quantity demanded is also called the demand curve.
Supply
To provide something necessary or desired to; furnish or equip
Supplied the players with uniforms.
Demand
An insistent and peremptory request, made as of right
A series of demands for far-reaching reforms
Supply
To have as a necessary or desirable feature
A crime scene that supplied valuable evidence.
Demand
Ask authoritatively or brusquely
‘Where is she?’ he demanded
The police demanded that he give them the names
Supply
To fill sufficiently; satisfy
Supply a need.
Demand
To ask for urgently or peremptorily
Demand an investigation into the murder.
Demanding that he leave immediately.
Demanded to speak to the manager.
Supply
To make up for (a deficiency, for example); compensate for.
Demand
To claim as just or due
Demand repayment of a loan.
Supply
The act of supplying
Funds for the supply of the expedition.
Demand
To ask to be informed of
Demanded an explanation for the interruption.
Supply
An amount available or sufficient for a given use; stock
Our supply of milk is low.
Demand
To require as useful, just, proper, or necessary; call for
A gem that demands a fine setting.
Supply
Often supplies Materials or provisions stored and dispensed when needed.
Demand
To lay legal claim to; claim formally.
Supply
(Economics) The amount of a commodity available for meeting a demand or for purchase at a given price.
Demand
To ask that (something) be done in accordance with a legal requirement.
Supply
(transitive) To provide (something), to make (something) available for use.
To supply money for the war
Demand
To make a demand.
Supply
(transitive) To furnish or equip with.
To supply a furnace with fuel; to supply soldiers with ammunition
Demand
An act of demanding; an urgent request.
Supply
(transitive) To fill up, or keep full.
Rivers are supplied by smaller streams.
Demand
Something demanded
On strike until they get their demands.
Supply
(transitive) To compensate for, or make up a deficiency of.
Demand
An urgent requirement or need
The heavy demands of her job.
The emotional demands of his marriage.
An increased oxygen demand.
Supply
(transitive) To serve instead of; to take the place of.
Demand
The state of being sought after
In great demand as a speaker.
Supply
(intransitive) To act as a substitute.
Demand
(Economics) The desire for goods or services in an economy, measured as the amount people are ready to buy at a given price
Supply should rise to meet demand.
Supply
(transitive) To fill temporarily; to serve as substitute for another in, as a vacant place or office; to occupy; to have possession of.
To supply a pulpit
Demand
A formal claim.
Supply
(uncountable) The act of supplying.
Supply and demand
Demand
A request that some act be done or payment made in accordance with a legal requirement.
Supply
(countable) An amount of something supplied.
A supply of good drinking water is essential.
She said, "China has always had a freshwater supply problem with 20 percent of the world’s population but only 7 percent of its freshwater". File:She said, “China has always had a freshwater supply problem.ogg
Demand
(Archaic) An emphatic question or inquiry.
Supply
(in the plural) Provisions.
Demand
The desire to purchase goods and services.
Prices usually go up when demand exceeds supply.
Supply
An amount of money provided, as by Parliament or Congress, to meet the annual national expenditures.
To vote supplies
Demand
(economics) The amount of a good or service that consumers are willing to buy at a particular price.
Supply
Somebody, such as a teacher or clergyman, who temporarily fills the place of another; a substitute.
Demand
A forceful claim for something.
Modern society is responding to women's demands for equality.
Supply
Supplely: in a supple manner, with suppleness.
Demand
A requirement.
His job makes many demands on his time.
There is a demand for voluntary health workers in the poorer parts of Africa and Asia.
Supply
To fill up, or keep full; to furnish with what is wanted; to afford, or furnish with, a sufficiency; as, rivers are supplied by smaller streams; an aqueduct supplies an artificial lake; - often followed by with before the thing furnished; as, to supply a furnace with fuel; to supply soldiers with ammunition.
Demand
An urgent request.
She couldn't ignore the newborn baby's demands for attention.
Supply
To serve instead of; to take the place of.
Burning ships the banished sun supply.
The sun was set, and Vesper, to supplyHis absent beams, had lighted up the sky.
Demand
An order.
Supply
To fill temporarily; to serve as substitute for another in, as a vacant place or office; to occupy; to have possession of; as, to supply a pulpit.
Demand
(electricity supply) More precisely peak demand or peak load, a measure of the maximum power load of a utility's customer over a short period of time; the power load integrated over a specified time interval.
Supply
To give; to bring or furnish; to provide; as, to supply money for the war.
Demand
To request forcefully.
I demand to see the manager.
Supply
The act of supplying; supplial.
Demand
To claim a right to something.
The bank is demanding the mortgage payment.
Supply
That which supplies a want; sufficiency of things for use or want.
Demand
To ask forcefully for information.
I demand an immediate explanation.
Supply
Auxiliary troops or reënforcements.
Demand
To require of someone.
This job demands a lot of patience.
Supply
The food, and the like, which meets the daily necessities of an army or other large body of men; store; - used chiefly in the plural; as, the army was discontented for lack of supplies.
Demand
(legal) To issue a summons to court.
Supply
An amount of money provided, as by Parliament or Congress, to meet the annual national expenditures; generally in the plural; as, to vote supplies.
Demand
To ask or call for with authority; to claim or seek from, as by authority or right; to claim, as something due; to call for urgently or peremptorily; as, to demand a debt; to demand obedience.
This, in our foresaid holy father's name,Pope Innocent, I do demand of thee.
Supply
A person who fills a place for a time; one who supplies the place of another; a substitute; esp., a clergyman who supplies a vacant pulpit.
Demand
To inquire authoritatively or earnestly; to ask, esp. in a peremptory manner; to question.
I did demand what news from Shrewsbury.
Supply
Serving to contain, deliver, or regulate a supply of anything; as, a supply tank or valve.
Demand
To require as necessary or useful; to be in urgent need of; hence, to call for; as, the case demands care.
Supply
An amount of something available for use
Demand
To call into court; to summon.
Supply
Offering goods and services for sale
Demand
To make a demand; to inquire.
The soldiers likewise demanded of him, saying, And what shall we do?
Supply
The activity of supplying or providing something
Demand
The act of demanding; an asking with authority; a peremptory urging of a claim; a claiming or challenging as due; requisition; as, the demand of a creditor; a note payable on demand.
The demand [is] by the word of the holy ones.
He that has confidence to turn his wishes into demands will be but a little way from thinking he ought to obtain them.
Supply
Provide or furnish with;
We provided the room with an electrical heater
Demand
Earnest inquiry; question; query.
Supply
Circulate or distribute or equip with;
Issue a new uniform to the children
Supply blankets for the beds
Demand
A diligent seeking or search; manifested want; desire to possess; request; as, a demand for certain goods; a person's company is in great demand.
In 1678 came forth a second edition [Pilgrim's Progress] with additions; and then the demand became immense.
Supply
Provide what is desired or needed, especially support, food or sustenance;
The hostess provided lunch for all the guests
Demand
That which one demands or has a right to demand; thing claimed as due; claim; as, demands on an estate.
Supply
State or say further;
`It doesn't matter,' he supplied
Demand
The asking or seeking for what is due or claimed as due.
Demand
The ability and desire to purchase goods and services;
The automobile reduced the demand for buggywhips
The demand exceeded the supply
Demand
An urgent or peremptory request;
His demands for attention were unceasing
Demand
A condition requiring relief;
She satisfied his need for affection
God has no need of men to accomplish His work
There is a demand for jobs
Demand
The act of demanding;
The kidnapper's exorbitant demands for money
Demand
Required activity;
The requirements of his work affected his health
There were many demands on his time
Demand
Request urgently and forcefully;
The victim's family is demanding compensation
The boss demanded that he be fired immediately
She demanded to see the manager
Demand
Require as useful, just, or proper;
It takes nerve to do what she did
Success usually requires hard work
This job asks a lot of patience and skill
This position demands a lot of personal sacrifice
This dinner calls for a spectacular dessert
This intervention does not postulates a patient's consent
Demand
Claim as due or just;
The bank demanded payment of the loan
Demand
Lay legal claim to
Demand
Summon to court
Demand
Ask to be informed of;
I demand an explanation
Common Curiosities
What is the point where Supply and Demand meet?
Equilibrium, where the quantity supplied equals the quantity demanded.
Can seasonal factors influence Demand?
Absolutely, like higher demand for heaters in winter.
Can Demand rise if prices rise?
Typically, demand decreases with a price increase, but exceptions exist like luxury goods.
Can advertising affect Demand?
Yes, effective advertising can increase demand for a product.
What happens if Supply exceeds Demand?
Prices usually drop due to a surplus.
Is there always a direct relationship between Supply and price?
Generally, but external factors or regulations can sometimes disrupt this.
What influences a product's Supply?
Production costs, technological advances, and external factors like weather.
Why might Demand decrease for a popular product?
Changing consumer preferences, higher prices, or better alternatives.
How does technology impact Supply?
Technology can increase supply by enhancing production efficiency.
How can a company increase its Supply?
By optimizing production, reducing costs, or expanding capacity.
Can government intervention affect Supply?
Yes, through regulations, subsidies, or taxes.
How do future expectations influence Demand?
If consumers expect higher future prices, current demand might rise.
Can a change in income affect Demand?
Yes, higher incomes might increase demand, while lower incomes decrease it.
If Supply is low, does it always mean prices will rise?
Typically, but other factors like consumer willingness to pay can play a role.
Can new competitors in the market affect Demand?
Yes, they can split or decrease demand for existing products.
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Written by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
