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Demand, Supply, and Equilibrium Demand and Supply is an economic model of determining the price of a particular product, keeping all other factors constant or excluding them altogether. It concludes that in a perfect economy where other external factors like taxes and prices are not included, the demand for a particular product equals the supply of the same.

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The link between personal preferences, consumption and the demand curve is one of the most closely studied relations in economics. It helps in analysing how consumers can strike an equilibrium between their preferences and expenditures. Theory Of Production Simply put, theory of production is a process of converting inputs to outputs.

It is a study that uses all the resources that go into the process of creating the final product which goes into market for consumption by the consumers.

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