The Law of Supply and Demand
Changes in supply and demand effect the price of a commodity. There are 4
An increase in demand will lead to a shortage of a good and an increase in
price; a decrease
in demand will lead to a surplus of a good and a decrease in price; an
increase in supply will
lead to a decrease in demand and decrease in price; a decrease in
supply will lead to an increase in
demand and an increase in price. These changes are short
term only because over time supply
and demand will balance.
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