The Simple Market Forces Washington Refuses to Admit

Basic economic thought starts by thinking about supply and demand. As price increases demand goes down. People may want goods or services, but some can’t afford them. As price decreases, demand goes up, more people can afford to buy. Supply increases as price goes up, more suppliers can make a profit. When price goes down, fewer suppliers can make a profit. If price goes low enough, price does not cover cost and supply drops to zero. When plotted as a graph, there are two lines. Where the two lines cross is the equilibrium price.