laws of supply and demand

The laws of supply and demand describe how prices are determined in a market. When demand for a product increases and supply stays the same, prices tend to rise because more people want it. Conversely, if supply increases and demand remains steady, prices generally fall because there’s more of the product available than buyers want. When demand drops or supply decreases, prices tend to fall or rise accordingly. These laws help explain why prices fluctuate and how markets balance out supply and demand naturally over time.