Explain the concept of supply and demand.

Explanation should include

• definitions of supply, demand, elastic demand, and inelastic demand
• how price interacts with supply and demand
• the influences on supply and demand. 

Process/Skill Questions:

• What is the difference between elastic and inelastic demand?
• When is supply-demand equilibrium achieved? How is it characterized?
• What is an example of a situation in which a shortage is caused by a change in supply? A change in demand?
• What product that you recently purchased could be used as an example of supply and demand in action?