This article covers methods of price determination according to the law of supply and demand, as well as the concept of elasticity and its types. In a market economy, price formation occurs as a result of the interaction between supply and demand. While the quantity of demand is determined through consumers' attitude toward the price of goods, supply determines the volume of goods brought to market by producers. From this perspective, the article analyzes methods of setting prices at equilibrium levels, and factors affecting changes in supply and demand. Additionally, the concept of elasticity is explained as an economic indicator that shows how much supply and demand change in response to changes in price, income, or other factors. Information is provided about the main types of elasticity - price elasticity, income elasticity, and cross elasticity of substitute goods..