What is Price pressure?

Price pressure is when prices go up or down because lots of people are buying or selling something.

Imagine you and your friends all want to buy the last chocolate bar in the lunchroom. You might be willing to pay more for it just to have it, that’s like price going up. That’s price pressure from demand, when a lot of people want something, so they’re ready to pay more.

Now imagine you and your friends all have extra candy bars to sell at the lunchroom. You might be willing to lower the price just to get rid of them, that’s like price going down. That’s price pressure from supply, when a lot of people are selling something, so they’re ready to take less money.

Sometimes, both things happen at once: more people want something, but there's also more of it available. It's like a tug-of-war, the price might not go up as much, or it might even go down a little.

In real life, this happens with toys, food, and even things like video games. If everyone wants the newest toy, its price might rise, but if lots of stores are selling it too, the price might drop again.