Originally Posted by
Schuba
So in 2001 the equilibrium price of Plasma and LCD televisions was $8000 because the supply was high and the demand was low. In 2006 the price dropped to $1500 because the demand was high and the supply was low?
Law of Supply: At higher prices, a larger quantity will generally be supplied than at lower prices, all other things held constant. At lower prices, a smaller quantity will generally be supplied than at higher prices, all other things held constant.
Law of Demand: When the price of a good goes up, people buy less of it, other things being equal. When the price of a good goes down, people buy more of it, other things being equal.