ELI5: Explain Like I'm 5

supply and demand

Supply and demand is the most basic part of economics. It's the way people and businesses decide to buy and sell things. In short, a product or service will be more in demand (people will be willing to pay more for it) if there is less of it available and vice versa.

To make an example: If there is an ice cream shop that only sells one flavor of ice cream, people will be willing to pay more for it because it's the only one they can buy. On the other hand, if the ice cream shop has a lot of different flavors, people won't be willing to pay as much because they have so many different choices.

Supply and demand also affects how much businesses charge for their products or services. If there is high demand for something but only a few businesses selling it, they will be able to charge more. On the other hand, if there is low demand and lots of businesses selling it, they will have to lower their prices in order to compete.

At the end of the day, supply and demand is all about balance. The goal is to make sure that everyone is happy and that businesses can make a profit selling the products or services people want.