Explain the 'Economic Problem' and how this closely links to the principles of demand and supply and how this ultimately determines the price of goods.

First of you must define the terms listed in the question throughly. The Economic Problem, in its most simple form, is that there are unlimited wants and limited resources/factors of production. The Economic Problem directly raises questions that every company must address with the: What to produce, Who to produce for, How to produce, and How much to produce. The economic problem enables firms/companies to calculate how much of a product to supply to the market in order to maximise profits. The higher the availability/supply of a product, the lower the price on the market. Availability of a product being high (usually bad news) may also be attributed to competitors selling a similar product. A company may choose to limit supply in order to increase the perceived value of a product to consumers and ultimately increase their profits via higher priced items. Essentially, consumers often want what they can't get. Demand & Supply :)