The significance of supply and demand for the market

In microeconomic theory, the theory of supply and demand explains how the price and quantity of goods sold in markets are determined.
In gеneral where goods are traded in a market, prices for goods tend to rise when the quantity demanded exceeds the quantity supplied at that price, leading to a shortage, and conversely those prices tend to fall when the quantity supplied exceeds the quantity demanded. This causes the market to approach an equilibrium point at which quantity supplied is equal to the quantity demanded. Thus, price is seen as a function of supply curves and demand curves.

Introduction…………………………………………………………………….…..3
Сhapter 1. A theoretic analysis of market’s main rules……………………….……4
1.1 A theory of price………………………………………………………………..4
1.2 Analysis of Markets……………. …………………………………………..….4
Сhapter 2. Supply and Dеmand curves.....................................................................6
2.1 Simple Supply and Demand curves……………………………………..……..6
2.2 Demand curve shifts… ………………………………………………..………7
2.3 Supply curve shifts……………………………………………………………..8
Chapter 3. The problem of the ratio between supply and demand. Subsidy as a way to solve it……………………………………………………………………..…….9
3.1 Effects of being аway from the Equilibrium Point……………………….……9
3.2 Subsidy………………………………………………………………………..10
Conclusion……………………………………………………………………...…12
References……………………………………………………………………...…13