Supply in economics and finance is often, if not always, associated with demand. The Law of Supply and Demand is a fundamental and foundational principle of economics. The law of supply and demand is a theory that describes how supply of a good and the demand for it interact. Generally, if supply is high and demand low, the corresponding price will also be low. If supply is low and demand is high, the price will also be high. This theory assumes market competition in a capitalist system. Supply and demand in modern economics has been historically attributed to John Locke in an early iteration, as well as definitively used by Adam Smith’s well-known “An Enquiry into the Nature and Causes of the Wealth of Nations,” published in Britain in 1776.
The graphical representation of supply curve data was first used in the 1870s by English economic texts, and then popularized in the seminal textbook “Principles of Economics” by Alfred Marshall in 1890. It has long been debated why Britain was the first country to embrace, utilize and publish on theories of supply and demand, and economics in general. The advent of the industrial revolution and the ensuing British economic powerhouse, which included heavy production, technological innovation and an enormous amount of labor, has been a well-discussed cause.