Supply is really important because it helps decide how much things cost and what people choose to buy. Here’s how it works:
Basic Idea: When there are more products available, prices usually go down. This happens because there are more items than people want to buy. For example, if a local farmer grows a lot of apples, the price for each apple might drop.
Price Changes: When people see that prices are lower because there are more apples, they often want to buy more. This is called the demand response. On the flip side, if there aren’t enough apples because the harvest was bad, prices can go up. This might lead people to buy fewer apples.
Balancing Act: Supply and demand work together to find a balance, which is called market equilibrium. If there is a big increase in supply, a new price will be set. This might cause people to change what they want to buy based on what they can afford.
In short, supply has a big effect on prices, and this shapes what people decide to buy in stores.
Supply is really important because it helps decide how much things cost and what people choose to buy. Here’s how it works:
Basic Idea: When there are more products available, prices usually go down. This happens because there are more items than people want to buy. For example, if a local farmer grows a lot of apples, the price for each apple might drop.
Price Changes: When people see that prices are lower because there are more apples, they often want to buy more. This is called the demand response. On the flip side, if there aren’t enough apples because the harvest was bad, prices can go up. This might lead people to buy fewer apples.
Balancing Act: Supply and demand work together to find a balance, which is called market equilibrium. If there is a big increase in supply, a new price will be set. This might cause people to change what they want to buy based on what they can afford.
In short, supply has a big effect on prices, and this shapes what people decide to buy in stores.