How do supply and demand determine product prices?

Supply and demand are like a game between sellers and buyers that decides how much something costs.

Imagine you're at a lemonade stand on a hot day. If supply (how many glasses of lemonade there are) is low, but demand (how badly people want lemonade) is high, the price goes up, just like when you’re really thirsty and only one person has lemonade left.

If there are a lot of lemonade stands (supply is high), and not many kids want lemonade (demand is low), then each glass costs less. It's like having a big party with lots of snacks, no one needs to pay extra for a cookie because there are plenty around.

But if it’s super hot, and only one stand is open (supply is low), but every kid wants lemonade (demand is high), then that one stand can charge more. It's like being the only kid with a toy everyone else wants, you can ask for more playtime because no one else has the toy.

So supply and demand are like a seesaw: when one goes up, the other might go down, and that decides how much something costs!