Like, who decided a carton of eggs cost 5$, or a specific car costs $50,000? I understand some of it is based on raw materials cost, labor costs, etc.
And big manufacturing companies can have market analysis to determine what price to make profits via supply and demand. But for basic commodity goods like groceries that are sourced from farmers and the like, how did they land on a specific number?
In: Economics
Think of it as tug of war: buyers vs sellers.
If there are more buyers than sellers – the price is pulled higher.
If there are more sellers than buyers – the price is pulled lower.
As prices go higher, it brings more sellers into the market.
Or think of an auction – but if the price goes high enough someone else starts selling another identical item.
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