The Key Difference Between Supply and Demand

Supply vs Demand
Feature	Supply	Demand
Definition	The quantity of a good or service that producers are willing and able to sell at different prices.	The quantity of a good or service that consumers are willing and able to purchase at different prices.
Perspective	Seller’s or producer’s side of the market.	Buyer’s or consumer’s side of the market.
Price Relationship	Direct relationship – as price increases, supply tends to increase.	Inverse relationship – as price increases, demand tends to decrease.
Law	Law of Supply: Higher price leads to higher quantity supplied.	Law of Demand: Higher price leads to lower quantity demanded.
Determinants	Production cost, technology, number of sellers, government policies.	Income, preferences, price of substitutes and complements, future expectations.
Graph Slope	Upward sloping from left to right.	Downward sloping from left to right.
Market Role	Determines how much product is available in the market.	Determines how much product consumers want to buy.
Elasticity	Supply elasticity shows responsiveness of quantity supplied to price changes.	Demand elasticity shows responsiveness of quantity demanded to price changes.
Effect of Shortage	Producers may increase supply or raise prices.	Consumers may compete or reduce consumption.
Effect of Surplus	Producers may cut back production or lower prices.	Consumers may increase purchases due to lower prices.
Interaction	Works with demand to determine market price and equilibrium.	Works with supply to determine market price and equilibrium.
Real-Life Example	Farmers increase supply of wheat when prices rise.	Consumers buy less gold when its price increases.
Shifts	Supply curve shifts due to changes in production conditions or input prices.	Demand curve shifts due to changes in consumer income or preferences.
Policy Impact	Government subsidies or taxes affect supply.	Price controls or income changes affect demand.
Goal	Maximize profit from goods and services offered.	Maximize utility or satisfaction from consumption.