Demand is the relationship between price and quantity demanded for a particular good and service in particular circumstances. For each price the demand relationship tells the quantity the buyers want to buy at that corresponding price. The quantity the buyers want to buy at a particular price is called the Quantity Demanded.

The reason demand is defined in such a way is to keep it simple, we may think of the buyers as consumers. Clearly, the buyers are the people who want or need the product or service -- but there is more to it than that. The word "demand" refers to the willingness and ability of people to purchase the good or service in the market. The demand relationship expresses that willingness and ability for the whole range of prices. To say that a person has a demand for a particular product is to say that the person has money with which to buy and is willing to exchange the money for the good. People will not demand what they do not want or need, but a wan

Here we have excess supply therefore the quantity supplied exceeds the quantity demanded. Quantity supplied is 2000 at a price of 40, while quantity demanded is only 600. Thus, suppliers will compete to sell what they can by cutting the price.

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