What economic principle illustrates how the quantity of a good or service affects its price?

The principle that best illustrates how the quantity of a good or service affects its price is the laws of supply and demand. This fundamental concept in economics states that the price of a good or service is determined by the relationship between its supply and demand. When demand for a product increases and supply remains constant, the price tends to rise. Conversely, when supply increases and demand remains constant, prices generally fall. This interaction between supply and demand creates a dynamic marketplace where changes in one can significantly impact the other, reflecting the core reason behind price fluctuations.

The other concepts, while related, do not directly describe the relationship between quantity and price as effectively as the laws of supply and demand. Elasticity of supply and demand focuses on how changes in price affect the quantity supplied or demanded, rather than the overall principle governing price determination. Equilibrium price is a result of where supply and demand meet, but it does not directly address how quantity influences price changes. Price ceilings and floors are regulatory limits set on how low or high prices can go and do not explain the fundamental relationship between quantity and price in a free market.