The following is the description from investopedia.com on demand and supply.
Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy.
Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship. Supply represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price. The correlation between price and how much of a good or service is supplied to the market is known as the supply relationship. Price, therefore, is a reflection of supply and demand.
Law of Demand:
Disequilibrium: Excess supply
Disequilibrium: Excess Demand
Read more: http://www.investopedia.com/university/economics/economics3.asp#axzz1eABLC82m
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