Question

How does the law of supply and demand operate?

Answer 1

The law of supply and demand operates in the market by determining the price and quantity of goods and services.

Step-by-step explanation:

The law of supply and demand operates in the market by determining the price and quantity of goods and services. According to the law of supply, when the price of a product increases, producers are willing to supply more of that product. Conversely, when the price decreases, producers are willing to supply less. On the other hand, the law of demand states that when the price of a product increases, consumers are willing to buy less of it. And when the price decreases, consumers are willing to buy more. The interaction between the supply and demand curves leads to an equilibrium price and quantity in the market.

Answer 2

When supplies of goods and service are plentiful, the prices usually drop but when they are scarce, prices start rising.