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How does supply and demand work in everyday life?


How does supply and demand work in everyday life?

Step 1

The demand and supply works as per economic laws in daily life as well.

When in some cases, the demand of a particular product increases but the supply of that product cannot be increased as per the level of demand. This means there is a shortage in the market for that product which will create the upward pressure on the prices of the product. The same principle reflects in our daily life as well.

For example,  for a newly released movie, the tickets for the show is limited however, the demand for tickets is very large and therefore, the cinema houses charges higher ticket prices for tehe recent releases. or we can say that the demand for tickets is higher during weekends. Therefore, the price of tickets is higher during weekends then during week days.

Second example for the above principle, the new make of a car company have a higher demand for new model but supply is limited, resulting in the selling of such model at a premium above the price.

Step 2

And when the supply of product is higher but does not have same demand i.e. having lower demand than supply, in such the price of such product have a downward pressure and prices get reduced. This happens in real world as well.

For example, in our daily lif...

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