Final answer:
Supply and demand influence the price of a product by indicating how much of the product is available and how much consumers want to buy. Higher prices typically result in a greater supplied quantity but lower demand, leading to a market equilibrium at a certain price point.
Step-by-step explanation:
Supply and demand help us understand how the supply of a particular product and the demand for it affect the price of the item. The supply refers to how much of a product is available to be sold, while demand indicates the consumer's desire to purchase that product. The Law of Supply suggests that a higher price tends to lead to a higher quantity supplied. Conversely, the Law of Demand indicates that a higher price will generally lead to a lower quantity demanded. These laws interact in the market to determine the market equilibrium, where the quantity supplied equals the quantity demanded at a specific price point, assuming no external changes occur to shift supply or demand curves.