Fundamental Concepts Demand and supply are basic concepts in economic analysis. This is because economics is fundamentally concerned with endsand means. The quantities of various goods demanded are expected to bring satisfaction of different wants or ends, the supply of these goods is conditioned by the availability or scarcity of resources which act as the means of production. Both the terms ‘demand’ and ‘supply’ have technicalimplications. By demand, we mean the quantity of any commodity that ‘buyers are willing and have the ability to buy.’ Both the conditions must be satisfied together before goods can be demanded. One who smokes wishes to purchase cigarettes but he must have enough money or resources to do so. Similarly, a quantity of a commodity is said to be supplied only when a seller is willing to sell it at the market price. The two concepts of demand and supply are, however, relative in nature and conveniently interchangeable. For example
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