Supply and demand is a fundamental economic principle describing the interaction between buyers and sellers of goods and services in a given market. The law of supply and demand states that as prices drop, more consumers will buy the product or service, while as prices rise, fewer people will be willing to purchase it. In other words, when supplies are plentiful, prices are low and vice versa. This dynamic relationship between buyers and sellers drives all markets, making it an essential concept for anyone who wants to gain an understanding of the way economies work.