Supply and demand together determine the price and quantity of a good sold in a market.

Question

Quizplus · Accepted Answer

Supply and demand are fundamental economic principles that interact to determine the equilibrium price and quantity of goods and services in a market. When demand for a good increases, prices tend to rise if supply remains constant, and vice versa. Similarly, if supply increases and demand remains constant, prices tend to fall. The interaction of supply and demand thus establishes the market price and quantity of goods sold.

Supply and Demand Together Determine the Price and Quantity of a Good