Supply and Demand, there is no getting away from it
by drinker on Sep.18, 2008, under Economics
I am sure you had many some type of economics course and never had a good grasp of supply and demand, because most people do not. Unfortunately for you supply and demand controls almost everything in your life.
The reason that most people do not understand supply and demand is because the supply and demand curve is about price not supply or demand. If the demand for something high but the supply is low the price is high. If the demand for something is low and supply is high the price is low.
If you want to see this action, go to a flea market. Stop by in the morning and check the prices and the supply of what the vendors are selling. Then stop by mid-day and see who has a lot of what ever they are selling and who has very little left to sell. You will see those with a lot of stock left to sell, they will begin to lower the prices. Why they don’t want to go home with the stuff. They want to make money on it. This is especially true if they do not have a new market to attend in the near future.
Ok that example was a little boring. Here is a better example for you bar flies. If you are at a bar and the ladies out number the guys say 2 to 1. Or maybe you need 3 to 1 after all you have nothing better to do then read some guys blog. In this case the supply of women has out stretched the demand (I know you may want two for the night but just be with happy with one). This will immediately move your chances up. As the night goes on people begin to adjust their standards (lower or raise their prices) till the final sale is made. If an actual transaction of money took place you wasted a lot of time and should have spent more time on Craig’s List.
I hope this gave you a little help in understanding supply and demand. But look forward to more on this in later series.
