answersLogoWhite

0

The price of any commodity is determined based on the Demand and Supply theory.

When the demand for a product is high and its supply low - it triggers a price increase

When the demand for a product is low and its supply high - it triggers a price fall

User Avatar

Wiki User

16y ago

What else can I help you with?

Related Questions

How does the interaction between supply and demand determine prices in a market?

The interaction between supply and demand in a market determines prices. When demand for a product is high and supply is low, prices tend to increase. Conversely, when supply is high and demand is low, prices tend to decrease. This balance between supply and demand helps establish the market price for a product or service.


Why do you have scarcity?

because its prise is determined by interaction between both demand and supply forces


What are Business cycles are linked to the interaction between?

the aggregate demand and aggregate supply curves.


The interaction of the producer and the consumer establishes a price?

Yes, the interaction of supply and demand between producers and consumers determines the equilibrium price of a good or service in the market. When supply exceeds demand, prices tend to fall, and when demand exceeds supply, prices tend to rise until an equilibrium is reached where both parties are satisfied.


What is spatial interaction?

A realized movement of people, freight or information between an origin and a destination :)Spacial interaction in supply and demand is a transportation supply and demand relationship that is often expressed over a geographical space.It is also the flow of people, such as commuters, over geographical space.


In a market economy what are prices are established by?

the interaction of supply and demand.


How does the concept of supply and demand influence pricing in the market?

The concept of supply and demand influences pricing in the market by determining the equilibrium price at which the quantity of goods or services supplied equals the quantity demanded. When demand exceeds supply, prices tend to rise, and when supply exceeds demand, prices tend to fall. This dynamic interaction between supply and demand helps establish market prices.


How are prices established in a free enterprise system?

by the interaction of supply and demand


What is the economy in which the interaction of supply and demand determines price and output?

Market Economy


What influences a market economy?

supply and demand competition no government interaction idk if these are right????


What is a good economic theory that explains the relationship between supply and demand in a market economy?

One good economic theory that explains the relationship between supply and demand in a market economy is the law of supply and demand. This theory states that the price of a good or service will adjust to bring supply and demand into balance. When demand for a product increases, prices tend to rise, encouraging suppliers to produce more. Conversely, when demand decreases, prices tend to fall, leading to a decrease in production. This dynamic interaction helps determine the equilibrium price and quantity in a market economy.


What is a real-world scenario where the concept of supply and demand plays a crucial role in determining the price of a product?

One real-world scenario where supply and demand determine the price of a product is the housing market. When there is high demand for houses but a limited supply of available homes, the prices of houses tend to increase. Conversely, when there is an oversupply of houses and low demand, prices may decrease. This dynamic interaction between supply and demand influences the pricing of houses in the market.