Final answer:
The law of demand posits an inverse relationship between price and quantity demanded, whereas the law of supply shows a positive relationship between price and quantity supplied. These economic laws illustrate how price influences consumer behavior and producer willingness to supply goods.
Step-by-step explanation:
The law of demand is a foundational principle in economics which asserts that, assuming all other factors are constant (ceteris paribus), there is an inverse relationship between the price of a good or service and the quantity demanded by consumers. Specifically, when the price of a good increases, the quantity demanded of that good tends to decrease, and conversely, when the price decreases, the quantity demanded tends to increase. This behavior reflects the economic reasoning that as the price of a good rises, the opportunity cost of purchasing the good also increases, leading consumers to purchase less or substitute the good with a more affordable alternative.
In contrast, the law of supply suggests that there is a positive relationship between the price of a good or service and the quantity supplied. As prices rise, producers are willing to supply more of the good because they can achieve higher revenue, and as prices decline, the quantity supplied typically decreases because the incentive to produce and sell the good diminishes.