supply and demand

Cultural

In classical economic theory, the relation between these two factors determines the price of a commodity. This relationship is thought to be the driving force in a free market. As demand for an item increases, prices rise. When manufacturers respond to the price increase by producing a larger supply of that item, this increases competition and drives the price down. Modern economic theory proposes that many other factors affect price, including government regulations, monopolies, and modern techniques of marketing and advertising.

Example Sentences

Examples are provided to illustrate real-world usage of words in context. Any opinions expressed do not reflect the views of Dictionary.com.

Amid this new conflict, said De Haan, there’s still a “very cloudy outlook” in terms of what level of retaliation Iran might pursue — with, notably, the supreme leader’s death now confirmed — and what that may mean for global supply and demand balances.

From MarketWatch

In July 2024, about 70 data centers withdrew from the grid when another high-voltage line failed, requiring a similar scramble to keep power supply and demand in line.

From The Wall Street Journal

Traders are “baking in a fat $10 risk premium,” or the extra price per barrel of oil beyond “fair value” based on supply and demand dynamics.

From MarketWatch

“While OPEC+ estimates that supply and demand will be in balance throughout this year, the International Energy Agency maintains its forecast of an oversupply of 3.7 million barrels per day throughout 2026,” Morrison said in a note to clients.

From MarketWatch

Definitions and idiom definitions from Dictionary.com Unabridged, based on the Random House Unabridged Dictionary, © Random House, Inc. 2023