Imagine a graph with two lines. The supply curve slopes upward: as prices rise, producers are willing to sell more. The demand curve slopes downward: as prices rise, consumers want to buy less. Where the two lines cross is the equilibrium price—the price at which supply equals demand.

Think of a conversation between a farmer and a shopper. When apples cost $1, the shopper says, "Great, I’ll take five!" But when apples cost $5, she says, "No thanks." Meanwhile, the farmer says, "At $1, I won’t bother harvesting. But at $5, I’ll pick every apple I’ve got." That back-and-forth is how supply and demand meet in real life.

Supply and demand describe how prices and quantity of goods are determined in a market. Supply increases as prices rise, while demand decreases as prices rise. The equilibrium price is where the quantity supplied equals the quantity demanded.

Picture a simple classroom activity: some students are "buyers," others are "sellers." You give each seller a card that says how much it costs them to produce a good, and each buyer has a max price they’ll pay. They walk around making deals. When no more trades happen, that’s your equilibrium.

Let’s role-play: you’re a store owner, I’m a customer. You raise the price of lemonade to $4 a cup. I say, "That’s too much—I’ll go to another stand." You realize sales are dropping, so you lower the price. We talk about what price works for both of us. That’s the negotiation between supply and demand.

Think about a time you saw something go on sale. Why were you more likely to buy it? Now imagine being the seller—what price would make it worth your time to sell that item? That reflection helps you understand the forces of supply and demand from both sides.