Introduction

You now know what supply and demand curves look like and what they stand for, but when you examine these curves on their own, you will still not know precisely at what price fried chicken pieces will be traded on the market. We merely analysed various hypothetical prices to see how consumers (as demanders) and producers (as suppliers) will react to them. Hence the exact prices at which transactions will be concluded have yet to be determined.

Market demand

Market supply

In this section of the learning unit we will deal with the determination of the price of a good or service through the interaction of the forces of demand and supply.