For goods considered necessities, demand may show little or no change. This means a decrease in supply will result in higher prices. If demand for a product increases, a decrease in supply will push prices higher.

The scarcity principle is an economic theory in which a limited supply of a good—coupled with a high demand for that good—results in a mismatch between the desired supply and demand equilibrium.

There is an inverse relationship between the supply and prices of goods and services when demand is unchanged. If there is an increase in supply for goods and services while demand remains the same, prices tend to fall to a lower equilibrium price and a higher equilibrium quantity of goods and services.

The law of supply and demand is a theory that explains the interaction between the sellers of a resource and the buyers for that resource. Generally, as price increases, people are willing to supply more and demand less and vice versa when the price falls.

There are two conditions, the ability and the desire to buy goods. A person may want a new computer but not have the means to purchase it. The Law of Demand is an inverse relationship between price and quantity demanded. The Law of Demand states that an increase in price causes a decrease in the quantity demanded.

Causes of Changes in Supply: Among the factors that can cause a change in supply are changes in the costs of production, improvements in technology, taxes, subsidies, weather conditions, health of livestock and crops. It is also affected by the price of other products.

Changes in supply are caused by changes in the cost of inputs, productivity, technology, taxes, subsidies, expectations, government regulations, and the number of sellers in the market.