Supply and demand is one of the most basic and fundamental concepts of economics and of a market economy. The relationship between supply and demand results in many decisions such as the price of an item and how many will be produced in order to allocate resources in the most cost-effective and efficient way.
Supply refers to the amount of goods that are available. Demand refers to how many people want those goods.
These are examples of how the law of supply and demand works in the real world.