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3 years ago

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Social Studies

1 answer:

Soloha48 [4]3 years ago

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Answer:

What Is the Law of Supply and Demand?

The law of supply and demand is a theory that explains the interaction between the sellers of a resource and the buyers for that resource. The theory defines the relationship between the price of a given good or product and the willingness of people to either buy or sell it. Generally, as price increases people are willing to supply more and demand less and vice versa when the price falls.

Explanation:

The law of demand says that at higher prices, buyers will demand less of an economic good.

The law of supply says that at higher prices, sellers will supply more of an economic good.

These two laws interact to determine the actual market prices and volume of goods that are traded on a market.

Several independent factors can affect the shape of market supply and demand, influencing both the prices and quantities that we observe in markets.

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