changes in relative prices are the driving force in the market mechanism
If a seller increase supply without changes in demand, his business will not last. He will have more supply than demand.
If there is not enough supply for the demand, the demand won´t be able to buy the supply
Then demand and supply are equal.
When demand decreases, supply increases.
When demand is greater than supply a supply shortage or scarcity arises and prices increase.
If a seller increase supply without changes in demand, his business will not last. He will have more supply than demand.
If there is not enough supply for the demand, the demand won´t be able to buy the supply
Then demand and supply are equal.
According to the law of supply and demand when supply increases, prices will decrease.
When demand decreases, supply increases.
When demand is greater than supply a supply shortage or scarcity arises and prices increase.
It changes when the market demand and or market supply changes.
If demand decreases and supply is constant, the price will increase.
They rise. Supply & demand.
Changes in supply and demand impact the equilibrium price of a product by influencing the balance between how much of the product is available (supply) and how much people want to buy (demand). When supply increases or demand decreases, the equilibrium price tends to decrease. Conversely, when supply decreases or demand increases, the equilibrium price tends to increase.
jack
If the price decreases then the economic law of demand & supply comes in operation with increase in demand and decrease in supply, as the producer will not supply at the price unsuitable to them in the market .