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Explain the basics of the law of supply and demand
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The law of supply and demand is a fundamental principle of economics that describes the interaction between the availability of a certain product and the desire of consumers to buy that product. It states that when the supply of a product increases, the demand for that product will decrease. Conversely, when the demand for a product increases, the supply of that product will increase. This law is closely related to markets, as it helps to dictate the prices of goods and services. In a market, the price of a particular product is determined by the balance between its supply and its demand. When the demand for a product increases, its price rises, cause the supply of the product to decrease. Likewise, when the supply of a product increases, the demand for it decreases and its price drops. In simple terms, the law of supply and demand suggests that the price of a product will be determined by the amount of available supply for that product relative to the amount of desired demand for that product.