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It’s the demand, stupid
Markets, and indeed most of the interactions between people that involve some form of exchange, are about supply and demand. Economics treats both as equals and is mostly concerned with the equilibrium between the two, but from a human nature perspective, one tends to dominate the other. But which one?
You don’t need to be an economist to know, or at least know of, the law of supply and demand, which captures the relationship between how much a good or service costs, the amount of which is on offer, and the amount of which is demanded. It expresses how, if the supply exceeds the demand, prices will tend to fall, which may both cause demand to rise, and supply to fall, until both are in balance. Conversely, if demand exceeds supply, prices will rise, which may both suppress demand, and increase supply — again, until both are in equilibrium. From this perspective, supply and demand are independent, equal factors in the market, tied together by the market price. A change in one will lead to a change in the other, mediated by the price.
In practice, however, we tend to perceive an imbalance between powerful suppliers — retailers, manufacturers, media companies — calling the shots…
