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supply and demand


One of the fundamental approaches to economics, which examines and compares the supply of a good with its demand (usually in the form of a graph of supply and demand curves plotted against price). For a typical good, the supply curve is upward-sloping (the higher the price, the more the manufacturer is willing to sell), while the demand curve is downward-sloping (the cheaper the good, the more demand there is for it). The point where the curves intersect is the equilibrium price at which supply equals demand.

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