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DEFINITION of 'Law Of Supply And Demand'. A theory explaining the interaction between the supply of a resource and the demand for that resource. The law of supply and demand defines the effect that the availability of a particular product and the desire (or demand) for that product has on price. Generally, if there is a low supply and a high demand, the price will be high.
buyers are able to purchase at a specific price 12.The law of demand says that the lower the price of a good , other things constant , a. the smaller the demand for that good b. the larger the demand for that good c. the smaller the quantity demanded of that good d. the larger the quantity demanded of that good e. the smaller the real income of ...