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Who decides the price of something?
The price of something is usually decided by the person or company that sells it, but supply and demand affect it too.
When you walk into a shop, you see a price tag on every item. This price is decided by the factory that makes it, or by the shop owner who sells it. When they set the price, they think about how much it cost to make the item, how much profit they want, and the price of similar items.
But the price does not always stay the same. If lots of people want an item and there is not much of it, the price goes up. If there is a lot of an item and no one wants it, the price goes down. This is called 'supply and demand'.
The government can also help set the price of some items. For example, the government may step in on the price of very important basic items, like bread, so that everyone can buy it at a fair price.
Quick facts
- The price of an item is usually decided by the person or company that makes or sells it.
- If there is not much of an item and many people want it, the price goes up.
- If there is a lot of an item and few people want it, the price goes down.
- This is called the balance of supply and demand.
- The government can also step in on the price of some basic items.
- The cost of making an item directly affects its price.
Check what you remember
3 questions — all of them come from the quick facts above. There is no score and no wrong turn.
1. If there is not much of an item and everyone wants it, what happens to its price?
2. What does the balance of supply and demand help decide?
3. Who can step in on the price of basic items like bread?
Where this comes from
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1 tr.wikipedia.org 80/100Supply and Demand - Wikipedia
An encyclopedia entry that explains how price is decided through supply and demand.
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2 tr.wikipedia.org 80/100Price - Wikipedia
A basic page that explains what price is and how it is formed.
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3 britannica.com 70/100Price - Britannica
A trustworthy encyclopedia page that explains the idea of price in economics.
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