Final answer:
Markets exist when demand and supply interact, determining prices and therefore goods and services.
Step-by-step explanation:
In the context of markets, markets exist when demand and supply interact. This interaction determines prices and therefore goods and services.
Prices in markets serve as a mechanism for collecting and transmitting information between buyers and sellers, helping to determine the relationship between supply and demand. Each consumer and producer reacts to changes in price based on their own preferences and profit expectations.
For example, when there is high demand for a certain product, its price will likely increase. Conversely, when there is low demand, the price may decrease. This dynamic interaction between demand and supply is what shapes and drives the market for goods and services.