A Supply Demand Model is a fundamental economic concept that explains how price and quantity of a good are determined in a free market. It focuses on the interactions between buyers (demanders) and sellers (suppliers), and points out that the cost of an item will increase when demand increases, while it will decrease when supply increases. The Supply Demand Model is based on the principle of equilibrium, which states that if the number of buyers and sellers remain equal, then the price of the good will be stable. This model is most commonly used to identify potential opportunities for investment and to analyze current market conditions.