What will happen if the demand is high and the supply is also high?
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So, when you think of supply and demand, it’s important to think of it in terms of *changes*. You’re saying supply and demand are “high”, but what is that compared to? The supply and demand for a different good? The supply and demand for the same good a year ago? The supply and demand for a substitute good?
For the purpose of your question, I’ll assume you’re asking what happens if supply and demand both *increase*. What does that mean?
When demand increases, that means that *people are willing to buy more of an item at a given price*. If a coffee shop sells 1,000 coffees a day for a price of $1.00 per coffee, an increase in demand would mean that they would start selling *more* than 1,000 coffees per day at a price of $1.00.
When supply increases, it means that *producers are willing to sell more of an item at a given price*. Imagine a toy company that makes 1,000 dolls each year and sells them for $40 each. An increase in supply would involve the producer making *more* than 1,000 per year and selling them for $40 each (alternatively, this could look like a producer selling the same amount of toys for a lower price).
If both supply and demand increase, the result is dependent on how much each increases. If demand and supply increase by the same amount, then you end up with a new equilibrium of consumers (producers) buying (selling) more of an item at the same price. If demand increases more than supply, then prices will increase along with quantity. If supply increases more than demand, then prices will decrease while quantity increases.
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