law of supply

Definition

If demand is held constant, an increase in supply leads to a decreased price, while a decrease in supply leads to an increased price.

Use law of supply in a sentence

When the train carrying widgets crashed on the other side of the mountains, the price of widgets in my hometown increased in accordance with the law of supply.

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During the OPEC oil embargo of the 1970s, oil-producing nations took advantage of the law of supply: since Western nations could do little to reduce demand, the tight control of oil exports led to drastically rising prices at the pump.

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One of the most essential truths of the free market economy is the Law of Supply, the more your product is desired the more effort you must put forward to meet that demand with adequate supply to ensure your business grows.

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law of one price quantity demanded