:max_bytes(150000):strip_icc()/law-of-supply-demand-final-6d3d58ceeb2b462d9a56f2f012641c5f.png "Law of Supply and Demand in Economics: How It Works")
Supply and demand work as fundamental concepts in economics to determine the price and quantity of goods in a market. The interaction between the quantity of a commodity that producers want to sell and the quantity consumers wish to buy establishes the market price, referred to as the equilibrium price, where both quantities match[2][6].
When prices rise, the quantity supplied typically increases while demand decreases, and vice versa for falling prices[5][1]. Changes in non-price factors, such as consumer preferences or production costs, can shift the supply or demand curves, leading to new equilibrium prices and quantities in the market[4][6].
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