§ 01
| Force | Effect on Price | Stock Market Example |
|---|---|---|
| Demand increases | Price rises | Earnings beat expectations, buyers rush in |
| Demand decreases | Price falls | Bad news, investors sell |
| Supply increases | Price falls | Secondary offering (more shares on market) |
| Supply decreases | Price rises | Share buybacks (fewer shares available) |
§ 02
The equilibrium price is where supply equals demand. In the stock market, this changes every second as new information arrives and participants adjust their views.
§ 03
Look at any ticker's **volume** bars on the chart. High volume at a price level shows where supply and demand found temporary agreement.
§ 04
§ 05
A product's price rises 10% and demand falls only 2%. What does this tell you about the business?
Five questions · AI feedback
Sit with the ideas.
A pharmaceutical company announces its new drug failed clinical trials. What happens to the supply and demand balance for its stock?
Why: