Supply and demand is perhaps one of the most basic concepts of economics and it is the backbone of a market economy. Demand refers to how much 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 goods producers are willing to supply when receiving a certain price. The relationship between price and how much of a goods or service is supplied to the market is known as the supply relationship. Price, therefore, is a reflection of supply and demand.    The law of demand states that, if all other factors remain equal, the higher the price of a product, the fewer people will demand that product. The amount of goods that buyers purchase at a higher price is less as the price of a product goes up, so does the opportunity cost of buying that product.    Like the law of demand, the law of supply shows the quantities that will be sold at a certain price. But unlike the law of demand, the supply relationship shows an upward slope. This means that the higher the price, the higher the quantity supplied. Producers supply more at a higher price because selling a higher quantity at a higher price increases the whole income.    Now that we know the laws of supply and demand, let's turn to an example to show how supply and demand affect price.    Imagine that a CD of your favorite band is sold for $20. Because the record company's previous analysis showed that consumers will not demand CDs at a price higher than $20, only ten CDs were sold because the opportunity cost is too high for suppliers to produce more. If, however, the ten CDs are demanded by 20 people, the price will then rise. As a result, the rise in price should cause more CDs to be supplied as the supply relationship shows that the higher the price, the higher the quantity supplied. If, however, there are 30 CDs produced and demand is still at 20, the price will not be pushed up because the supply is more than the demand. We know from the passage that changes in the prices of product cause changes in   _  .
income and expense invention and production market and society supply and demand