When there is more demand for something than what is available, especially during big changes in the economy, a few important things can happen:
Price Increase: First, prices usually go up. For example, if a brand-new smartphone comes out and everyone wants it, but there aren’t many in stock, the price can quickly rise.
Allocating Resources: Suppliers need to figure out how to share their limited resources. This can create a more competitive situation where only the people willing to pay the most will get the product.
Shortages: When demand stays high and supply is low, shortages happen. This means customers might have a hard time finding the product, which can lead to frustration.
Incentivizing Production: Higher prices can encourage suppliers to make more of the product because they want to meet the growing demand.
In short, when demand goes up, prices tend to rise, and suppliers have to change how they do things to keep up.
When there is more demand for something than what is available, especially during big changes in the economy, a few important things can happen:
Price Increase: First, prices usually go up. For example, if a brand-new smartphone comes out and everyone wants it, but there aren’t many in stock, the price can quickly rise.
Allocating Resources: Suppliers need to figure out how to share their limited resources. This can create a more competitive situation where only the people willing to pay the most will get the product.
Shortages: When demand stays high and supply is low, shortages happen. This means customers might have a hard time finding the product, which can lead to frustration.
Incentivizing Production: Higher prices can encourage suppliers to make more of the product because they want to meet the growing demand.
In short, when demand goes up, prices tend to rise, and suppliers have to change how they do things to keep up.