Why Do Prices Suddenly Drop or Rise All at Once?

Prices can change all at once because people and businesses react to big events together. Imagine you're in a store, and everyone around you starts buying the same toy, prices might go up quickly because the shop runs out of stock. Or if lots of stores decide they don’t need as many toys anymore, prices might drop suddenly.

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Examples

When all your friends decide to buy the same toy at once, prices go up quickly.
If a new restaurant opens and everyone starts eating there, the price of meals might jump.
If your family suddenly stops buying ice cream for weeks, the store might drop the price.

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Categories: Economics · inflation· deflation· market trends· economic cycles