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

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Under the scheme, power costs would match local supply and demand.

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Ticket prices can rise and fall daily, based on supply and demand.

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"The current problem is a huge imbalance between supply and demand," says Juan Villén, of Idealista.

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If California and other states were to pursue targets of recycling 40% or 50% of their wastewater, the researchers said, that would go a long way toward addressing the river’s gap between supply and demand.

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The river’s average difference between supply and demand has been estimated to be between 2 million acre-feet and 4 million acre-feet annually, Gold said.

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supply supply chain

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