According to economic theory, consumption of goods and services is assumed to provide utility (satisfaction) to the consumer or end-user, although businesses also consume goods and services in the course of producing other goods and services (see: Distribution: Channels and intermediaries).

Supply. The amount of goods available.

Demand is simply the quantity of a good or service that consumers are willing and able to buy at a given price in a given time period. People demand goods and services in an economy to satisfy their wants, such as food, healthcare, clothing, entertainment, shelter, etc.

Goods are material things wanted by human beings. They can be seen or touched. Services are non-material things. These cannot be seen or touched only their effects are felt.

There are three main types of services, based on their sector: business services, social services and personal services.

A free market is one where voluntary exchange and the laws of supply and demand provide the sole basis for the economic system, without government intervention. A key feature of free markets is the absence of coerced (forced) transactions or conditions on transactions.

They are: economic freedom, voluntary (willing) exchange, private property rights, the profit motive, and competition.

Consequently, under socialism supply and demand operate as production relations which are expressed directly in the sphere of exchange and distribution, and which in turn exert an active influence upon pro- duction and consumption. state organization to another.