law of supply and demand

  

Definition

The common sense principle that defines the generally observed relationship between demand, supply, and prices: as demand increases the price goes up, which attracts new suppliers who increase the supply bringing the price back to normal. However, in the marketing of high price (prestige) goods, such as perfumes, jewelry, watches, cars, liquor, a low price may be associated with low quality, and may reduce demand.

Use this term in a sentence

Related Articles

Related Videos




http://www.businessdictionary.com/definition/law-of-demand-and-supply.html

Have a question about this term? Ask for help in the
Community
advertise here

Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z