When a product has low supply and high demand, the price of the product typically increases. This happens due to the basic economic principle of supply and demand. Here's why:
1. Low Supply: When there is a low supply of a product, it means that there are fewer units of the product available in the market compared to the demand for it. This scarcity can drive up the price of the product because consumers may be willing to pay more to obtain it due to its limited availability.
2. High Demand: On the other hand, when there is high demand for a product, it means that consumers desire the product more than what is currently available in the market. This increased demand puts upward pressure on the price as sellers can charge higher prices when there are more buyers willing to purchase the product.
Combining these two factors - low supply and high demand - leads to an increase in the price of the product. Sellers can raise prices because they know that consumers are willing to pay more to secure the limited quantity of the product available.
In conclusion, when a product faces low supply and high demand, the price of the product is likely to increase as sellers capitalize on the situation to maximize their profits.
