Supply and Demand

The supply of a thing, in the phrase “supply and demand," is the amount that will be offered for sale at each of a series of prices; the demand is the amount that will be bought at each of a series of prices. The principle that value depends on supply and demand means that in the case of nearly every commodity, more will be bought if the price is lowered, less will be bought if the price is 1. Therefore sellers, if they wish to induce buyers to take more of a commodity than they are already doing, must 2 its price; if they raise its price, they will sell less. If there is a general falling off if in demand — due, say, to trade depression — sellers will either have to reduce prices or put less on the 3; they will not be able to sell the same 4 at the same price.

Similarly with supply. At a certain price a certain amount will be offered for sale, at a higher price more will be offered, at a lower price less. If consumers want more, they must offer a higher price; if they want less, they will probably be able to force prices down. That is the first result of a change in demand or supply.