Difference Between Supply vs Demand

Supply and demand are two macro-economic factors which are being addressed often at every forum and discussion points. The two major terms are used often by economists, bankers but what are the meaning and the rationale behind discussing these points. In this Supply vs Demand article, we will look at the two terms in details and try to understand the key difference between the two widely used macro-economic terms which are often simple but are complicated when one look into it in detail.

Head to Head Comparison between Supply vs Demand (Infographics)

Below is the top 4 difference between Supply vs Demand

Key Differences between Supply vs Demand

Both Supply vs Demand are popular choices in the market; Let us discuss some of the major differences between Supply vs Demand:

Demand refers to the available demand of a particular product or thing in the market in other words how much of that quantity does the customer desires it and want to purchase it is called demand. Supply, on the other hand, refers to the availability of that product with the vendor or the manufacturers of that product in the market and how much of that the supplier is willing to sell it in the market
A demand of a product is derived from a number of factors which are the availability of a product, the income level of a customer, customer preferences of that particular product, availability of an alternative product in the markets. On the contrary supply of a product depend on a number of factors which are Number of suppliers of that product in the market, nature of the product, scarcity of the resources to produce the product and various other factors
Demand represents always the customer i.e. it tells us about the customer demand and preferences of the product and the customer likes and dislikes of the product. On the other hand Supply of a product refers to the firm or the supplier which tells us about the supply and the availability of various products in the market. It also tells us about how much of the product the supplier is able to supply for a given period
The law of demand states that demand is inversely related to the price of the product that is with an increase in the price of the product the demand for that product decreases and vice versa. On the other hand, the law of supply states that supply of a product is directly related to the price of the product which states that with an increase in the price of a product the quantity supplied for that product increase and vice-versa
Supply is a simple principle which is used to determine the price of a product through the suppliers perspective and it is most commonly used in economies whereas demand, on the other hand, is a simple principle to determine the price of the product through the customers perspective and it is also commonly used in economics.

Supply vs Demand Comparison Table

Let’s look at the top 4 Comparison between Supply vs Demand.

Supply	Demand
Supply of a firm or a company is generally upward sloping nature.	Demand is always downward sloping in nature as it is inversely related to the price of the product.
Supply of a product increases when the demand for the product increases and decreases when the demand of a product decreases.	Demand increases when supply is held constant of a product and decreases when the supply of a product increases.
Supply of a good depends on the following factors:- An expectation of a future price increase Change in technology State of nature Price of related goods produce The number of suppliers	The demand of a good depends on the following factors:- Availability of substitute in the market Income of the customers Customer preferences and taste Price of related goods in the market Population
A demand for a product is derived by the bargaining power of the customer.	Supply of a product is derived from the bargaining power of a supplier.

Conclusion – Supply vs Demand

In today’s world, even a slight change in the price of a product can have a huge impact on the Supply vs Demand of goods and services. Equilibrium in the market is achieved when the demand of the goods meets the supply of that good the market is said to be in equilibrium and at that equilibrium price the transaction between the supplier and the customer will take place. Any price other than that the transaction will not happen.

It is very important for both the customer and the supplier to strike a balance between the price of the product in order to fulfill needs and wants.

Popular Course in this category