Price (Supply and Demand)?

Question

What does price mean and what does price provide? How are supply and demand affected by price? If gas goes up in a relatively short period of time (same day or overnight) what is that telling us (think critically)?

Answer 1

The price is the amount that a party feels they can sell a good or service for. Price provides a starting point for buyers and sellers to open negotiations. As price goes up so does supply - more sellers enter the market and demand goes down less buyers are willing to pay the higher prices. If price goes up in the short run there is an anticipated decrease in supply. That can be real or speculative but nonetheless will affect price. Instability in oil producing countries is a common example of an occurrence that drives up prices in the short run.

Answer 2

If gas goes up that means we have high demand for low supply.

If supply was higher prices would go down, If demand was lower prices would go down.

Answer 3

price means the medium by which value of goods is measured.demand and supply is greatly affected by price.if price is higher,demand is low and if price is lower supply will be high.a seller charges the price of good by finding the elasticity between his demand and supply!