supply and demand

In classical economic theory, the relation between these two factors determines the price of a commodity. This relationship is thought to be the driving force in a free market. As demand for an item increases, prices rise. When manufacturers respond to the price increase by producing a larger supply of that item, this increases competition and drives the price down. Modern economic theory proposes that many other factors affect price, including government regulations, monopolies, and modern techniques of marketing and advertising.

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Example Sentences

Examples have not been reviewed.

“By January, maybe they’ll get supply and demand in balance.”

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It's a simple issue of supply and demand, agricultural economist Kunio Nishikawa of Ibaraki University says.

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There might be some truth to that: As David Ortega, a food economist at Michigan State University, told me, egg producers generally set their prices based on the research conducted by various analytics firms that evaluate the supply and demand in the market.

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“And I did tell her, that price does reflect the current demand of the totes online, the market, supply and demand, It's not necessarily a stagnant price.”

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“The water levels of the Colorado River are dwindling due to climate change, and this trend is expected to persist and worsen,” the environmental groups said in the petition, adding that unless the federal government changes its approach to water deliveries in California, Arizona and Nevada, where the regulations apply, “the growing disparity between supply and demand will lead to a severe crisis.”

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supply supply chain

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