Why is it that in economics, when demand is greater than supply, prices “automatically” go up? Isn’t it sellers that decide to raise prices because buyers are willing to pay more? Couldn’t sellers choose to not raise prices?
In: 821
Yes, hypothetically this could happen, but what would typically happen is a secondary market would immediately form where some of those who purchased the limited supply first turn around and resell at higher prices to those who didn’t get there early enough, a practice called scalping. Few examples of when this happens in the US is for sold out concerts and high demand Christmas gifts on a black Friday sale.
Latest Answers