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if you pay more for something, there will tend to be more of that something available
The law of '''supply and demand''' states that prices in a free market economy will tend to rise or fall based on the relationship between the ''[[supply]]'' of goods and services and the ''[[demand]]'' for them.
The law of '''supply and demand''' states that prices in a free market economy will tend to rise or fall based on the relationship between the ''[[supply]]'' of goods and services and the ''[[demand]]'' for them.
People indicate how much they want something (demand) by the amount of money they are willing to pay for it. The fundamental law of economy is that if you offer enough money for something, someone will endeavor to supply it for you (Milton Friedman).
People indicate how much they want something (demand) by the amount of money they are willing to pay for it. [[Milton Friedman]] said,
*There's a fundamental economic law which has never been contradicted: if you pay more for something, there will tend to be more of that something available. If the amount you're willing to pay for anything goes up, somehow or other somebody will supply more of that thing. [http://www.youtube.com/watch?v=L-7oMOxPjNE Youtube video]
While buyers wish to pay as low a price as possible, sellers wish to charge as high a price as possible. When supply is stable, price quickly reaches an [[Equilibrium price|equilibrium]] where ''bids'' and ''offers'' match.
While buyers wish to pay as low a price as possible, sellers wish to charge as high a price as possible. When supply is stable, price quickly reaches an [[Equilibrium price|equilibrium]] where ''bids'' and ''offers'' match.