To Market, To Market – Episode 2: A Glut in the Market: How Supply and Demand Affect Prices

    | July 2, 2012

    Download this story

    This week’s script is the second of a five-part series on understanding and using market information, published in 2003. With the benefit of accurate market information, farmers can decide what crops to grow, and where and when to sell in order to get the best prices.

    In this week’s story from the Comoros Islands, a farmers’ group builds their own market. Yet there are complaints from some farmers that the quota system adopted at the market does not allow them to sell their goods when there is an oversupply.

    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 – then prices usually decrease. On the other hand, if demand is high or supply is low – if people want more of a product than is available – the price frequently goes up. Prices are often determined by how much of a product is on sale at any given time.