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Principle Of Supply And Demand

Definition of "Principle of supply and demand"

Jenn Clifford
  Key Realty, Inc.

Economic principle determining the market prices of goods, services, and property. The principle states there is a pricing relationship between supply and demand for real property. Economic forces interact affecting the overall pricing relationship. If demand for a given property increases and the supply remains constant, then the price will increase. However, an increase in price will then spur increased supply which will tend to depress prices.

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