in economics, is supply same as items produced, and demand same as items sold?

Question

supply = what is produced/fabricated?
demand = what is sold?

Answer 1

You need to understand the difference between 'demand' and 'quantity demanded', and in paralell 'supply' and 'quantity supplied'.

Quantity demanded is the quantity of a product, say sweets, that someone is willing and able to pay for at a given price of a product. May be is a sweet costs 1p, I'll want to and be able to buy 100 of them.

Demand is a collection of these quantities demanded, can show how many sweets I would be willing and able to buy at different prices. May be if the price rises to 2p I'll only buy 40; if it rises to 3p, I'll only buy 15 and so on... The lower the price, the more I will tend to buy.

The assumption behind a demand curve (and hence demand) is that everything else remains constant (for example the price of cookies, the amount of pocket money I have...).

The same distinction applies to quantity supplied (given a price) and supply (at many different prices). The only difference is that the lower the price, the less will be produced given that profits are lower.

Therefore, going back to your question, supply is, as you say, the quantity produced at different prices.

Demand is the quantity people are willing and able to buy at different prices.

Quantity demanded is the quantity sold only when, at the given price, the quantity supplied is equal to or higher than the quantity demanded (more products fabricated than people can buy, or exactly the quantity they can buy).

If however, given the price the quantity demanded is higher than the quantity supplied, then the quantity sold will be the quantity supplied and you will end up with people with unsatisfied demand, a shortage.

In a free market with competition, prices will then increase to entice more quantity supplied, while at the same time decreasing the quantity demanded. (Basically we are using the same supply and demand conditions, but changing the prices). This should continue until the quantity demanded is equal to the qunatity supplied, and that occurs at the 'equilibrium price'.

Answer 2

Supply, are the units made available to the market. This is not necessarily the same as units produced, particularly in the short term.Some could have been produced and put into stock. Effective demand is created by ready, willing, and able buyers. Latent demand is the total that could be sold if buyers were ready and willing only. Demand is not the same as items sold, although clearly all the items sold were effectively demanded. But more could have been effectively demanded than were made available to be sold.

Answer 3

Demand is an inverse relationship with quantity and Supply has a direct relationship to quantity supplied. Often people quip, 'well we'll buy less oil' and that will effect the 'demand'....in fact, your only effecting the 'qauntity demanded' on the curve BUT NOT THE CURVE.. Demand doesn't equal what's sold, rather it buyers 'willing and able' to purchase products at varied prices. Same holds true "suppliers able and willing to produce" Your going to run into "ELASTICITY" of price during your class, it's very simple,,,,it's how fast consumers react to a change in price.
Prices were 2.40 dollars a gallon in America and we still drove, INELASTIC we didn't respond at all....so the prices went a little higher 3.00...now we started to respond by buying smaller cars (causing FORD and GM great problems) This became "elastic". BBUT it took some time. In Europe, a .20 cent hike would send many more quickly to the buses to get to/from work. It measures consumers reactions to varied changes in price.

Answer 4

You're on the right track. Supply would be better classified as "goods that are available." Demand would be better classified as "goods that are wanted." It's important to remember that there are situations where the demand is much greater than the supply (think of Ford Escape Hybrids -- if you want to get one, you have to put your name on a waiting list). Also bear in mind that goods that are produced or fabricated may not be ready for sale because they're defective or they're being delivered to the seller, etc.

Answer 5

Demand is not what is sold.

Supply and Demand very much dependant on each other. Demand is how much customers want, or what they want. I.e. I want 500 pairs of shoes, and I have the means to pay for it, that creates the demand for 500 pairs of shoes.

If a shoe-maker is able to make 500 pairs of shoes, then my demand will be satisfied.

However, if they make 400 pairs of shoes, then there is still demand for 100 shoes. That opens up doors for others to come in the market and make those 100 pairs of shoes.

On the other hand, if I want 500 pairs of shoes, but there are 600 pairs of shoes available in the market, my demand is satisfied, but supply is too large for the demand that exists.

Answer 6

in theory, yes, if the market (consumers and producers) is left to its own devices, it will clear (what is produced is sold) however, if the government interferes, this may not be the case. for example, the infamous wine lakes and butter mountains that resulted from the eu imposing minimum price guarantees. producers produced a lot of stuff because of the guaranteed high prices, but prices were too high for many consumers, therefore there were large surplusses. i could explain it a lot better with supply & demand diagrams

Answer 7

Actually none... California is the closet to "socialism" in the U.S. and is going bankrupt! Liberal economics are theory based & proven USELESS in history. However, Liberals don't let the truth persuade them! Their IDEOLOGY is flawed in my opinion. That is why they are doomed to REPEAT a flawed historically debunked economic policy. Socialism creates a sense of laziness. A perfect example is when East & West Germany become ONE Nation again. The East Germans were extremely lazy. They went to their jobs and thought that they just needed to do VERY little. Any plan must be feasible and not a Pie-in-the-Sky fantasy that will destroy a Country's Economy!! So, beware what you ask for b/c you might just get it. Capitalism is not perfect, but it is the best form of an economy. America was founded & grew tremendously on such a system. With any economic philosophy you have problems, Joseph A. Schumpeter referred to it as "Creative Destruction." So, just b/c it goes through bad times doesn't mean it is the wrong system. All those Liberals who use Capitalism as a "Scapegoat" are blinding the masses into thinking socialism is the answer... but based on what facts are they presenting. A feeling just doesn't prove anything to me, you must judge for yourself!

Answer 8

Supply is what is available for sale (new or used, or collectable), demand is what is wanted by consumers regardless of what is available... the two combined help to dictate a market price.

Answer 9

supply should equal demand, but often not the case

you've got supply right, demand is how much supply can be sold but not necessarily what supply has for demand

God bless

Answer 10

no supply dosent equal to items produced and demand is also not equal to items sold.