Ask AI: The interaction between the law of demand and the law of supply determines the equilibrium price and quantity of a product.

That's absolutely correct! The law of demand and law of supply work together to determine the equilibrium price. The law of demand states that when prices fall, people will buy more of a product, and when prices rise, people will buy less. On the other hand, the law of supply states that when prices rise, suppliers will produce more, and when prices fall, they will produce less. The point at which the quantity supplied equals the quantity demanded is the market equilibrium. At this point, the price at which sellers are willing to sell a product matches the price buyers are willing to pay. There is no shortage or surplus of the product. If there's an imbalance between demand and supply, the market will self-correct. For example, if supply exceeds demand (a surplus), prices will drop until there's enough demand for the product. Conversely, if demand exceeds supply (a shortage), prices will rise until supply and demand are in balance again. This is how the interaction between supply and demand sets the equilibrium price and quantity.