Supply and demand determine prices in a market economy from "summary" of Economics for Beginners by Andy Prentice,Lara Bryan
In the world of economics, prices are not set arbitrarily or by some mysterious force. Instead, they are determined by the basic principles of supply and demand. This concept is fundamental to understanding how markets operate in a capitalist economy. Let's break it down. Supply refers to the quantity of a good or service that producers are willing and able to offer for sale at a given price. On the other hand, demand is the quantity of a good or service that consumers are willing and able to buy at a given price. When these two forces interact in a market, they reach a point of equilibrium where the quantity supplied equals the quantity demanded. At this equilibrium point, prices are set bas...
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