Supply and demand is considered a basic economic concept, as well as a fundamental part of a free market economy. Demand is the quantity of the product or service that consumers want to acquire. Supply is the quantity of a product or service available on the market. The relationship between supply and demand has a great influence on the price of products and services. In the market economy, the distribution of resources is determined by the correlation between supply and demand. However, the theory of supply and demand will allocate resources as efficiently as possible. Demand can be defined as the quantity of goods or services that buyers are willing and able to purchase at various prices during a given period of time (Bolotta and Hawkes 453). The law of demand states that the quantity demanded of a product varies inversely with its price, as long as other things do not change (Ceteris Paribus) (Bolotta and Hawkes 457). Therefore, the higher the price of a good, the lower the quantity demanded and vice versa. Demand theory can best be represented in a downward sloping graph. At point A, the price is at P1 and the quantity demanded is at Q1. This shows that if the price of a product is too high, the demand for it would decrease. At point C, however, the price is P3 and the quantity demanded is Q3. When the price is low, there would be a high demand for the product. Therefore, market forces will eventually move to point B where the price at P2 and quantity demanded at Q2 can meet (equilibrium). The positive side of demand is that it creates jobs as manpower is needed to produce the products according to the quantity demanded. . As demand increases, manufacturers will always try to explore new ways to increase the quantity of the product. For example, in the market, if there is an increase in demand for mobile phones, then there is an incentive for the supplier to increase their production and thus ultimately it may lead to an increase in price which will only benefit the profit of the supplier. On the other hand, if there were a decrease in demand on the market, the supplier would not be able to sustain production costs and therefore will inevitably lead the supplier to explore new ways of reducing costs..