Market principles refer to the fundamental concepts that govern how markets operate. These principles include supply and demand, which dictate how prices are set based on the availability of goods and the desire of consumers to purchase them. When demand exceeds supply, prices tend to rise, while an oversupply can lead to lower prices. Another key principle is competition, which encourages businesses to improve their products and services. In a competitive market, companies strive to attract customers by offering better quality or lower prices. This dynamic fosters innovation and efficiency, benefiting consumers and the economy as a whole.