2006-10-23 05:02:26 · 5 answers · asked by dubkza 1 in Politics & Government ➔ Law & Ethics
If supply increases, demand for each product decreases thereby causing the price to drop.
The inverse is also true, If supply decreases the demand for each product increases, causing prices to rise.
For example: Normally, Tom sells widgets for $2.00 a piece and there are 100 widgets on the market each month. Suddenly half the widgets are destroyed. That makes these widgets more valuable, so now Tom can sell them at the market for $3.00 each. Or perhaps the opposite happens, Judy can make the same exact widgets Tom makes and is selling 100 of them. Now Widgets are worth less because of how many are available. Judy and Tom will sell there widgets for $1.50 each.
2006-10-23 05:49:51 · answer #1 · answered by Tara P 5 · 0⤊ 0⤋
As goods and services are more available the price falls and as there is a shortage the price goes up. This is in simple terms but the market can be manipulated by such things as advertiseing to increase demand and as in gasoline pricing by elevating fear of shortage.
2006-10-23 12:06:26 · answer #2 · answered by Kenneth H 5 · 0⤊ 0⤋
If the product is in demand then the prices go up! but if they aren't really needed the prices go down, this was explained to me actually last night haha, ironic
2006-10-23 12:06:03 · answer #3 · answered by Vicky 1 · 0⤊ 0⤋
High demand/low supply - price goes up
Low demand/high supply - price goes down
2006-10-23 12:04:23 · answer #4 · answered by Buffy Summers 6 · 0⤊ 0⤋
DEMAND proporal to price.
SUPPLY inversely proporal to price.
*Excluding corruption and stupidity
THANK U .... Antoine Augustin Cournot
2006-10-23 15:03:48 · answer #5 · answered by Genuis by Design 3 · 0⤊ 0⤋