Supply and demand
Supply and demand is the model that explains how the price and quantity of a good are set by the interaction of buyers and sellers.
Two forces, pulling in opposite directions, settle almost every price you have ever paid. Supply and demand is the model of how they meet.
Supply and demand is the framework explaining how the price and quantity of a good are determined by the interaction of buyers, who want more as prices fall, and sellers, who offer more as prices rise. The point where the two balance is the market equilibrium: the price at which the quantity buyers want equals the quantity sellers will provide.
How the balance is struck
If the price sits above equilibrium, sellers offer more than buyers will take, a surplus builds, and price is pushed down. If it sits below, buyers want more than sellers supply, a shortage appears, and price is pulled up. The market gropes toward the price that clears it, not because anyone designs it to but because surpluses and shortages create pressure in predictable directions.
Shifts versus movements
The common confusion is between moving along a curve and shifting it. A change in the good's own price moves buyers and sellers along their existing curves. A change in something else, incomes, tastes, the price of inputs, the number of competitors, shifts the whole curve, producing a new equilibrium. Keeping the two straight is most of what it takes to use the model well; conflating them produces most of the bad reasoning about prices.
Power and limits
Supply and demand is the most useful single idea in economics and also the most over-applied. It assumes many buyers and sellers, decent information, and no serious market failures. Where those conditions hold, it predicts with uncanny reliability. Where they do not, under monopoly, externalities, or deep uncertainty, the simple model misleads, and its confident users with it.
Understood for what it is, a clear account of how price coordinates the wants of strangers, supply and demand explains an enormous amount. Mistaken for a law that holds everywhere regardless of conditions, it becomes a way of being confidently wrong about markets that do not meet its assumptions.