What is the Difference Between Demand Curve and Supply Curve?

The demand curve and supply curve are fundamental concepts in economics that represent the relationship between the price of a good or service and its quantity demanded or supplied, respectively. The main differences between the demand curve and supply curve are:

1. Slope: The demand curve is downward-sloping, indicating that the lower the price of a good, the higher the demand, and vice versa. On the other hand, the supply curve is generally upward-sloping, reflecting the willingness of producers to sell more of the commodity at higher prices.
2. Representation: The demand curve shows the quantities of a particular good or service that buyers will be willing and able to purchase at each price during a specified period. The supply curve, on the other hand, shows the quantities that sellers will offer for sale at each price during the same period.
3. Factors affecting the curves: Changes in non-price factors, such as consumer preferences or income, can cause a shift in the demand curve, while changes in the price of the commodity can be traced along a fixed demand curve. The supply curve can shift based on factors such as changes in production costs, technological progress, or the prices of substitute products.
4. Equilibrium: The equilibrium price is determined by the interaction of the demand and supply curves. When the price of a good is too low, demand exceeds supply, and the market experiences a shortage. Conversely, if the price is too high, supply exceeds demand, leading to a surplus. The equilibrium price is the price at which the quantity demanded equals the quantity supplied, and no surplus or shortage occurs.

In summary, the demand curve represents the relationship between the price and quantity demanded of a good or service by buyers, while the supply curve represents the relationship between the price and quantity supplied of a good or service by sellers. The equilibrium price is determined by the interaction of these two curves, ensuring that supply and demand remain balanced.

Comparative Table: Demand Curve vs Supply Curve

The difference between the demand curve and the supply curve lies in their respective relationships with price and quantity, as well as the factors they represent in the market. Here is a table summarizing the differences:

In summary, the demand curve represents the relationship between the price of a good and the quantity demanded by consumers, while the supply curve represents the relationship between the price of a good and the quantity supplied by producers. The demand curve is downward-sloping, and the supply curve is upward-sloping. The equilibrium price is determined by the intersection of these two curves.