Law of Demand

The law of supply and demand is possibly one of the most essential concepts and it is the backbone of an economy. According to the law of demand and supply, when there is a higher demand for a product or service, there is a rise in the supply of such product or service and vice versa. The law of demand and supply describes the interaction between the desire for a product and the supply of that product. For example, if the supply of a product is low and the demand is high, it signifies such product is lacking for the number of people that desires it, therefore, it will lead to an increase in the price of the product.