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What is Law of Supply and Demand?

Crypto Terms Glossary: What is Law of Supply and Demand?

The law of supply and demand is among the most foundational laws of economics used to explain how market economies allocate resources and establish the prices of goods and services. Usually, increased availability of a specific resource means that a lower price will be paid for it. Conversely, if it is difficult to acquire a product or service, its demand will result in an increased price, but if there is a similar product or service that is readily available, its cost will go down. Products and services should ultimately reach a price equilibrium in relation to their supply and demand.

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