What does the term 'supply and demand' refer to in economics?

The term 'supply and demand' in economics specifically refers to the relationship between the availability of goods (supply) and the consumer's desire for those goods (demand). When the supply of a good increases or decreases, it affects its availability in the market, which in turn influences how much consumers are willing to buy at different price levels. Similarly, when demand for a good rises or falls, it indicates how much consumers desire that good, again affecting its price and availability. Understanding this relationship is fundamental in determining market dynamics, pricing strategies, and overall economic trends. It encapsulates how market equilibrium is reached when the quantity of goods supplied matches the quantity demanded, influencing economic activity as a whole.