Supply and demand economics is a fundamental concept in business that explains how prices and output of goods and services are determined in the market. It seeks to understand how buyers and sellers interact in order to determine the price of goods and services. The laws of supply and demand state that when demand for a good or service increases, so does its price; conversely, when demand for a good or service decreases, its price goes down as well. By understanding the basic principles of supply and demand economics, businesses can identify ways to increase profits by improving their pricing strategies.