Why the suppliers sell at the price they do?

In any market transaction between a seller and a buyer, the price of the good or service
is determine by supply and demand in a market. The law of supply and demand is an
economic theory that explains how supply and demand are related to each other and
how the relationship affects the price of goods and services. There are four basic law of
supply and demand. Which are;

1. If demand increases and supply remains unchanged, then it leads to higher

equilibrium price and higher quantity.
2. If demand decreases and supply remains unchanged, then it leads to lower
equilibrium price and lower quantity.
3. If supply increases and demand remains unchanged, then it leads to lower
equilibrium price and higher quantity.
4. If supply decreases and demand remains unchanged, then it leads to higher
equilibrium price and lower quantity.

It's a fundamental economic principle that states that when there is an oversupply of a
good or service, prices fall. When there is high demand, prices tend to rise. However,
there are some causes why the supplier sell at the price they do.

One of the suppliers sell at their price is the number of sellers. As more or fewer
producers enter the market this has a direct effect on the amount of a product that
producers are willing and able to sell. More competition usually means a reduction in
supply, while less competition gives the producer an opportunity to have a bigger
market share with a larger supply.

Advancement in technology or techniques of production enable the firms to produce

more product with fewer resources. Resources are costly, using fewer of them lowers
cost of production and able increases supply. Furthermore, improved technology and
automation will increase production and able to reduce cost. This means that more can
be supplied at the same price or the same quantity can be supplied at lower prices.

Next, the expectation of producers. Changes in producers expected price will change the
supply for a product. If the producers expect prices to rise in the future then they will
increase output to take advantage of the expected higher prices. If prices are expected to
decline the producers will reduce a production and decrease supply.
After that, another example that supplier sell at their price is a resource prices to
produce the product. An increase in the price of resource will increase the cost of
production thereby reduce profits. The reduction in profits reduces incentives for some
company to supply output each product price. On the other hand, lower resource price
reduce production costs and increase profits. So, when the resource prices fall, firms
supply greater output at each product price.

Supply may change because of changes in the legal or legislative such as taxes and
subsidies. An increase taxes will increase the cost of production and therefore
decreasing supply. Subsidies, the opposite of taxes, can lower the cost of production and
increasing the supply.