Supply and demand are essential economic concepts that describe the relationship between the amount of a product available to consumers and the price of the product. Essentially, they determine the level of economic activity and are critical to determining a country's economic stability. Understanding supply and demand allows businesses to make decisions and ensure a stable market.

Under normal circumstances, demand for a product is determined by the amount of available supplies and the price of the product. When consumers have more money, they're generally able to purchase more products. If business is booming, sellers may have more stock than they need. They can then increase the price of their products to greater profits. Businesses will also promote their products to gain potential customers. 

At times, governments may subsidize a certain product to increase sales- either through social welfare or through direct intervention. In these situations, consumers may have limited knowledge of the subsidized product and its price. Subsidized products may have excess supplies, which drives down demand and increases prices.

When excess supplies are available, sellers can set their own prices for the product and compete with demand. Sellers can also control the quantity produced- either intentionally or unintentionally through manufacturing processes or inventory control systems. When sellers control the quantity produced, they can raise prices without decreasing sales. High prices may entice customers to buy more products but may also prompt competitors to raise their own prices in response to high supply. This process will gradually reduce sales until there's only enough demand left to encourage small profit margins. In this way, market forces can affect consumer prices regardless of whether sellers are intentionally trying to raise prices or not.

When demand outstrips supply, the market's price will move toward balance. This natural process is known as equilibrium, and it occurs when all sellers in a market attempt to balance supply and demand for their products. If there's still enough demand for a product, sellers will increase production to meet that demand- eventually bringing supply and demand into balance. As demand diminishes, production will cease until there's only enough supply left to cover minimal replacement costs for stocks currently in use. The process will repeat itself until there's enough supply again to match minimal replacement needs for stocks currently in use. The rate at which supply increases or decreases depends on factors such as production capacity and replacement costs for stock currently in use.