I intend to examine two fundamental concepts, supply and demand and in doing so this essay will look at defining and discussing income and cross price elasticity, consider the significant changes of elasticity overtime by using numerical examples and graphs, and finally apply this theory to the construction industry. First and foremost, the theory of supply and demand is one of the essential theories of economics. Supply is the amount of product that a producer is willing and able to pay at a particular price, whereas demand is the amount of product that a buyer is willing and able to buy at a specific price. The model for supply and demand shows the relationship between a product’s accessibility and the interest shown in it.

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