Mark SimpsonHelping short-term rental hosts get the tools, tactics and training to grow direct bookings with confidence

Maximizing Profit: Understanding the Law of Supply and Demand

1 Apr 2024 · 1 min

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0:57

Short instructional segment from a YouTube video that defines supply as the quantity of goods available (illustrated with apples) and demand as the number of people wanting those goods. Explains the inverse relationship between supply/demand and price: more buyers raise prices, more supply or fewer buyers lower average prices. Notes that sellers may lower prices to ensure sales when supply is high, which reduces market average price. Introduces dynamic pricing as day-by-day price adjustments responding to demand fluctuations.

Chapters

Supply and demand is. In this case, supply is the number of apples that you have. Demand is the number of people wanting your apples. Total volume of apples that people want to buy. The more people who want to buy apples, the more you can charge for your apples. But that's inverse also, the more apples there are on the market and the less people that want to buy them, the average price for an apple sold will go down. I'll say that again. The more apples on the market and the less people that want to buy them, the overall average price of an apple sold will go down. So that means there are still plenty of apples that are high priced on the market. But the people who recognize that there's too many apples to be sold, they will drop their prices to make sure they're one of the apples sold. And thus the average price per apple will go down. Dynamic price is this concept chasing the market? We can raise prices for some days and we can drop prices for some days, depending on what days are in high demand. And this is a day per day thing.