Supply & Demand
Buy low and sell high!
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- Buy low and sell high!
The law of supply and demand states that the price of any good will adjust to bring the quantity supplied and quantity demanded into balance.
Real World Examples
Companies supply goods and services. Customers want to obtain the goods and services that companies supply. This exchange happens through prices that are established in markets. Those prices change, depending on the level of demand for a product and how much is supplied.
For instance, hotel rates near Disney World are reduced in the fall when demand is low, and peak in March when demand is high. If spring break takes you to a ski resort, you will find lots of company and high prices. But if you are looking for an outdoor adventure during the summer, ski resorts have plenty of lodging available at great rates.
Sol, at Pike Place Fish Market, and the other seafood vendors must respond to price changes by adjusting what they offer for sale in the market.
This is why Sol offers more salmon when the price of salmon rises, and less salmon when the price declines.