$1 is no far, page-38

A simple example to understand the supply-demand-price relationship.

Product A (Home brand) and Product B ( Branded)

A is selling for a $2 and B is selling for $10. There are 10 buyers in the market. After some time the price of A is put up to $5. 3 out of 10 say the price is not right especially when the quality of the product is not that good. The seller is happy he is still making the same profit. Again ater some time the price is put up to $7. Another 4 buyers drop out quoting the same reason, saying they might as well put another $3 and buy the branded one.

Slowly the seller realises, that in line with the price the quality has to get better as well. He just cant keep asking any price. He puts the price down to where it was which is $2 and the buyers step in to buy the homebrand once again.

Similarly, with Linc the buyers exhausted when the SP hit $3. All what the market is doing now showing no demand for this product and the price is falling to a level where the buyers are comfortable paying and can see the quality getting better.