Supply and Demand Explained in One Minute

let's assume you live in a small town
00:02
where nobody sells bananas
00:03
in other words zero supply now let's
00:07
also assume that the people who live
00:08
there would love to eat bananas in other
00:10
words there's a decent demand for
00:12
bananas as we can see there is currently
00:15
an imbalance people want bananas but
00:17
there are no sellers Peter understands
00:20
this and starts selling bananas at the
00:22
beginning his profits will be huge
00:24
because lots of people want bananas and
00:25
he's the only one who has them as time
00:28
passes however sorrow will notice how
00:30
well Peter is doing and starts selling
00:32
bananas yourself this increases the
00:35
supply of bananas and diminishes Peters
00:37
profit potential the more people start
00:39
selling bananas the more supply there
00:41
will be if too many people end up
00:43
selling bananas but the demand doesn't
00:45
increase as well there will be too much
00:47
supply and some of them will go out of
00:49
business eventually some kind of a
00:51
balance tends to be reached