economics

A price is made up of both market forces of supply and demand. Supply represents how much of a product is available, while demand represents the amount of people who want to purchase that product. Prices are determined by the free market, with increased supply lowering prices and increased demand raising prices. For example, if a handful of companies control the supply of a product, they will be able to hold the price higher because there is not enough of the product. Conversely, if the demand is much greater than the supply, prices will tend to increase.