Supply and demand. Ever heard of it? It affects the price of everything you buy. Pretty cool, huh? You’ve probably already noticed that items in a store don’t all cost the same. An item’s price is determined by how much it costs to produce and ship to the store. This includes the cost of things like materials, produce, labour, transportation and a number of other factors. Besides production costs, supply and demand are also major factors that influence the prices of various products. Here’s what we mean: Let’s say that you’re shopping with your parents for some swim gear to wear to the pool this summer. Right before swim season, swim gear is normally more expensive than in the fall. Can you guess why? It’s because in the spring, lots of people are buying swim gear in preparation for the summer. But not a lot of people are doing that in the fall after swim season’s just ended. For this reason, we can say that in the spring, the demand for swim gear is higher than the supply. Demand refers to the number of shoppers interested in the same product. Supply refers to the number of products available to be purchased. So that awesome floatie you wanted to buy for your pool? It’ll cost more right before summer. And less in the fall, when very few people will feel like buying it. Smart shoppers wait for demand to go down and then buy their items at a lower price! But prices don’t just fluctuate because of the seasons. Trends, advertising and new product releases all play a role. These factors can all increase or decrease demand, which can then influence the price. Psst! Now that you understand supply and demand, keep an eye on the price of things you want to buy so that you spend less! Well done! You’ve now finished watching our video on supply and demand.