How does supply and demand work?

Supply and demand work as fundamental concepts in economics to determine the price and quantity of goods in a market. The interaction between the quantity of a commodity that producers want to sell and the quantity consumers wish to buy establishes the market price, referred to as the equilibrium price, where both quantities match^[2][6].

When prices rise, the quantity supplied typically increases while demand decreases, and vice versa for falling prices^[5][1]. Changes in non-price factors, such as consumer preferences or production costs, can shift the supply or demand curves, leading to new equilibrium prices and quantities in the market^[4][6].