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26 August, 06:28

Supply affects prices

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  1. 26 August, 07:15
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    Over supply or undersupply affects the prices

    Explanation:

    The level of supply of a product or service in the market affects its price. When a product is over-supplied, the prices tend to fall. The principle will work best for necessary goods such as food and gas, but will also apply in all commodities.

    For example, during the rainy season, vegetables and other agricultural products are in high supply. As a result of their prices tend to decline. If the supply of oil is low globally, price tends to increase.
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