Difference Between Demand and Supply


Main Difference

The main difference between Demand and Supply is that Demand refers to how much buyers and Supply (quantity of a product or service) represents how much the market can offer.

Demand vs. Supply

The balance between the price and the quantity demanded of a product or the commodity at a certain period is called demand. To the contrary, the balance between the price of the product or goods and the quantity that supplied at a given period called as supply. While the paying aptitude and the devotion of the buyer at a specific price is demand, while the quantity that is said by the producers of those products to its customers or consumers at a particular price supplied demand has an opposite or indirect relationship with the price that is if the price of the goods increases the demand decreases. Likewise, if the price of the product decreases then the demand increases, however, on the flip side, the price has a direct association with supply, that is if price decreases then the supply will also decrease and if the price increases supply also increases. Demand do represent the consumer or the customer’s preferences and taste for a product or the commodity that is demanded by him, on the other hand, Supply does represent the firms, which is how much of the good or the commodity is offered by those producers in that huge market.


Comparison Chart

Demand is the longing of a buyer and his ability to pay for a particular commodity at a specific price.Supply is the abundance of a commodity which is made available by the producers to its consumers at a certain price.
When demand increases supply decreases, i.e., an inverse relationship.When supply increases demand decreases, i.e., an inverse relationship.
Impact of Price
With a rise in price the demand decreases and vice versa, i.e., indirect relationship.Supply enlarge along with the increase in price. So it has a direct relationship.
Effect of Variations
Demand rise with the supply remaining the same take to shortage while demand decreases with the supply remaining the same leads to a surplus.Supply rise with the demand remaining the same leads to surplus while supply decreases with the demand remaining the same leads to a shortage.
Who Represents What?
Demand represents the consumer.Supply represents the firm.

What is Demand?

Demand is a commercial or economic principle referring to a consumer’s desire and willingness to pay the price for definite product or service. Holding all other elements constant, an increase in the price of a good or service will decrease demand, and vice versa. Think of demand as your readiness to go out and buy a definite product. For example, market demand is the summing what everyone in the market wants. Businesses often spend a substantial amount of money to determine the amount of demand the public has for their goods and services. Incorrect estimations moreover result in money left on the table if demand is disrespect or losses if demand overestimated. There are five determinants of demand. The most important is the price of the good or service itself. The second is the price of related products, whether they are substitutes or complementary. Circumstances drive the next three determinants. These are consumers’ incomes, their tastes, and their expectations.

Basis of Classification

  • Individual Demand and Market Demand
  • Total Market Demand and Market Segment Demand
  • Derived Demand and Direct Demand
  • Industry Demand and Company Demand
  • Short-Run Demand and Long-Run Demand
  • Price Demand
  • Income Demand
  • Cross Demand

What is Supply?

Supply is an essential economic impression that describes the total amount of a specific product or service that is available to consumers. Supply can link to the amount available at a specific price or the amount available cover a range of prices displayed on a graph. This connects closely to the demand for a product or service at a particular price; all else being equal, the supply presented by producers will increase if the price rises because all firms look to maximize profits. The concept of supply in economics is complicated with many mathematical formulas, practical applications, and contributing factors. While supply can relate to anything in demand that sold in a competitive marketplace, supply is most used to relate to goods, services, or labor. One of the major important factor that influence supply is the good’s price. Generally, if a good’s price rise so will the supply.


  • Market Supply
  • Short-term Supply
  • Long-term Supply
  • Joint Supply
  • Composite Supply

Key Differences

  1. The stability between the quantity demanded and the price of a product at a given time is known as demand. On the other hand, the stability between the quantity supplied and the price of a commodity at a given time known as supply.
  2. Demand is the readiness and gainful capacity of a buyer at a specific price while Supply is the quantity provided by the producers to its customers at a specific price.
  3. Demand has an oblique relationship with the price, i.e., if price increases the demand decreases, as well as if the price decreases the demand increases, despite that, the price has a straight or direct relationship with supply, i.e., if cost or price increases the supply will also increase, in addition, if the price decreases supply also decreases.
  4. While demand curve slopes downward, the supply curve is upward sloping.
  5. Demand illustrates the customer’s inclination and preferences for a particular product demanded by him, though supply renders the firms.


The market flooded with several substitutes in each product category, and quick rise or fall in the prices will have an influence on these goods, and their demand and supply may increase or decrease. Demand and supply refer to the relationship price have with the quantity consumers demand and the quantity supplied by producers. As for price increases, quantity demanded decreases and quantity supplied increases.