The Supply and Demand Principle is a fundamental economic concept that determines the price and availability of goods and services in a market. It states that when demand increases while supply remains constant, prices will go up; conversely, when supply is increased while demand remains constant, prices will drop. In other words, prices are determined by the relationship between how much people are willing to pay for something (demand) and how many sellers are willing to offer it at that price (supply). By understanding this basic principle, companies can make better decisions about what products to produce and sell, as well as figure out the best price point.