Which of the following best describes the concept of supply and demand?

Supply and demand is a fundamental economic concept that highlights the relationship between the availability of goods in the market and the consumers' willingness to purchase those goods. The correct description is that supply refers to the quantity of goods or services that producers are willing and able to offer at various prices, while demand represents consumers' desire and ability to purchase those goods or services. This interplay between supply and demand determines the market price and the quantity of goods sold.

In this context, understanding that supply measures how much of a product is available in the market and demand reflects how much of that product consumers want to buy helps clarify how prices fluctuate. For example, if a product is in high demand but limited supply, the price tends to increase. Conversely, if supply exceeds demand, prices may fall, illustrating the dynamic nature of this economic principle and how it governs market behavior.