Economic principles are the foundational concepts that guide how economies function. They include ideas such as supply and demand, which explain how the availability of goods and services affects their prices. When demand for a product increases while supply remains constant, prices tend to rise. Conversely, if supply exceeds demand, prices usually fall. Another key principle is opportunity cost, which refers to the value of the next best alternative that is forgone when making a decision. Understanding these principles helps individuals and businesses make informed choices about resource allocation, investment, and consumption in their daily lives.