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WHY DO MARKETS CHANGE PRICES?

Jalen Peterson
3-5-14
English Composition II
102.03
In general markets, there are many factors that can cause price change in products that are
sold. Whether the production is going well or not in a market, prices of goods will eventually

change because of some other factor. My question is why do markets change their prices when
they do? What causes markets to increase or decrease their prices? I am going to address how
supply and demand is an important factor in change in market prices; how governments can
control market prices; and how technology affect market prices.
Supply and demand is an important factor in price change. Supply is the available goods
the market has to offer to their consumers. Demand determines what amount of people wants
goods in markets. A high amount of supplies leads to markets being able to produce their goods to
consumers and maintain low affordable prices. A low amount of supplies will result in low
production for goods for consumers. In turn, markets will have to raise their prices to save up their
supplies. Similarly, low prices lead to an investment drought. (Why the oil price is falling
534). A low demand for goods in markets will cause them to decrease prices to sell their goods.
For example, the Organization of Petroleum Exporting Countries failed to reach agreement on
production curb and this led to oil prices to fall (Why the oil price is falling 534). This led the
demand of goods to be low because of weak economic activity (Why the oil price is falling
534). There are other forces outside supply and demand that can affect prices, such as
governments.
Governments are an outside force that can be an effect in price change in markets.
Governments can control price levels in markets. Governments can make laws that markets have
to follow when for selling and producing goods. Governments can also set prices to a certain
extent. For instance, Canada has unique rules for sales of alcohol in off-premise establishments
where both government and privately controlled stores sell all types of off-premise alcoholic
beverages (Macdonald, et al. 22). Governments can limit the amount of money markets can make
up to. In Canada, each of the 13 provincial or territorial governments has jurisdiction over the

control of sales for alcoholic beverages, and considerable regulatory diversity exists (Macdonald,
et al. 22). In other territories, governments have some form of control in sales in markets. Markets
will face consequences that can result in loss of their establishment if they do not obey the
government. Governments can affect price change, but technologies can also effect market prices.
Technologies can change market prices as well. Technology is important in markets since
they can influence productivity in new supplies (Renko). Improved technologies can produce
more goods in markets. An improved dishwasher would be more efficient to use in a restaurant
with busy crowds on a daily basis. Companies need to anticipate their future customers' needs
and the development of the markets in general (Renko). By improving technology, markets are
able to maintain their supplies and maintain market price to satisfy their consumers. If the
technology in markets is outdated, the market price will be higher than other markets that have
better technology. If technology fails, then productivity of goods will fail. Some western oil
companies perform high-cost projects to drill in deep waters for oil (Why the oil price is falling
534). Since they have good technology, they are able to find new ways in to increase their supplies
to maintain prices. It is important for markets to improve their technologies to help prevent decline
in the amount of supplies for their goods.
Supply and demand, governments, and technologies are significant in price changes.
Supply and demand needs to be maintained in markets in order to maintain stability. Governments
can set rules to control markets prices. Technologies can improve and diminish the productivity in
markets. Taking advantage of price change is important in readiness of change in prices and to
avoid confusion when prices drop or increase when it happens.

Works Cited
Macdonald, Scott, et al. "A Comparison of Private and Government-Controlled Liquor Stores in
2

British Columbia."Contemporary Drug Problems 39.4 (2012): 641,661,591. ProQuest. 4


Mar. 2015
Renko, Maija. Market Orientation in Markets for Technology - Evidence from Biotechnology ,
2013. ProQuest. 4 Mar. 2015
"Why the Oil Price is Falling." The Economist (Online). Dec 08 2014. ProQuest. 4 Mar. 2015