Supply and Demand

We all know how capitalism works. If demand increases prices go up, if supply increases then prices go down, supply and demand are the real things, while the prices float up and down in response.

But the housing market does not work like that, people like to make a profit on their houses, so they will gladly have their house on the market for a long time, holding out for what they think their house is worth.

But supermarkets don't sell milk like that, they sell it as a loss leader, to bring people into the shops.

But shares don't work like that, when prices go up, people are more keen to buy them. When prices go down, people want to sell them.

Maybe what everyone always knew about supply and demand and prices really isn't so true after all.