Why Do Prices Fluctuate Daily?

Imagine a lemonade stand on a hot day. If everyone wants lemonade but you only have five cups, you can charge more. If it starts raining, fewer people want lemonade, so you must lower the price to sell them before they go bad. This is how prices work every day.

Think of prices like a seesaw. On one side is supply (how much stuff is available). On the other side is demand (how much people want it). When demand goes up, the price goes up. When supply goes up, the price goes down.

Prices change because the world changes every day. Maybe a truck broke down, so there is less milk in the store. Or maybe a new video game came out and everyone wants it. The store owner changes the sticker on the shelf to match the new situation.

If you have too much of something, you lower the price to clear the shelf.

• Supply: How much is available
• Demand: How much people want it
• Price: The balance point

If you have 100 apples but only 10 people want them, you drop the price to get rid of the rest. If you have 1 apple and 100 people want it, you raise the price. This balancing act happens in every store, every day.