Supply and demand
Prices tend to rise when people want more of something than is available, and fall when there's more than people want.
In the news
How “supply and demand” came up in recent issues.
- Oct 26Oil jumps and stocks slide: what it means for gas money
“Oil is a commodity: a basic raw material, like wheat or copper, that is bought and sold in huge amounts and whose price moves with supply and demand.”
Learn the bigger idea
- Supply and demand, explainedWhy concert tickets, gas and phones cost what they do, explained with the most useful idea in economics.
- Tariffs and trade, explainedWhat a tariff is, who ends up paying it, and why countries trade with each other in the first place.
Related words
- Supply
- How much of something sellers are willing to sell at each price. When the price goes up, sellers usually offer more.
- Demand
- How much of something people want to buy at each price. When the price goes up, people usually buy less.
- Equilibrium price
- The price where the amount people want to buy equals the amount sellers want to sell.
- Shortage
- When people want to buy more of something than sellers have, usually because the price is too low.
- Surplus
- When sellers have more of something than people want to buy, usually because the price is too high.
- Tariff
- A tax on goods brought in from another country. The importing business pays it, and some of the cost often reaches shoppers.
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