Supply and demand

Definition

Supply and demand is an economic model that determines the price of goods and services based on their availability (supply) and consumers' desire to buy them (demand). In this context, it impacts the international political economy by influencing trade policies, market stability, and economic growth.

Related terms

Market equilibrium: The state where the quantity of goods supplied equals the quantity demanded at a specific price point.

Trade policies: Government rules regulating international trade that can affect global supply and demand by imposing tariffs or quotas.

Economic growth: An increase in the capacity of an economy to produce goods and services, compared from one period of time to another, which can be influenced by changes in supply and demand dynamics.