To market, to market – Episode 2: A glut in the market: How supply and demand affect prices

    | July 7, 2014

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    This week’s story about raising chickens in Uganda mentions that, as supplies dwindle, market prices often rise.

    Our script of the week is the second part of a five-part series on understanding and using market information. One of the critical benefits of having accurate information about the market is that farmers can then decide what crops to grow, and where and when to sell those crops in order to receive the best prices.

    This script illustrates the laws of supply and demand. If there are large quantities of a certain product in the market – more supply than people can or will buy – prices usually decrease. On the other hand, if demand is high or supply is low – in other words, if people want more of a product than is available – prices frequently rise. Prices are often determined by how much of a product is available for sale at any given time.