Every time prices go up,
most people rush to blame the merchant.
“Thief! Greedy! Money-hungry!”
But let’s pause for a moment —
and I’ll explain why it’s not always that simple.
Prices Are a Game of Supply and Demand
Product prices aren’t just set by merchants alone.
They’re controlled by the classic equation of supply and demand.
And this equation isn’t always balanced.
Sometimes there’s a disturbance —
either on the demand side, the supply side, or both —
and this imbalance directly affects prices.
Let’s break this down from both angles:
1. When Demand Shifts
Imagine this:
Someone announces,
“In six months, electricity prices in Jordan will double.”
What’s the first thing you might do?
If you have some cash, you’ll probably rush to install a solar energy system at home.
Now imagine hundreds of others hearing the same news and thinking the same way.
The result?
Demand for solar systems skyrockets…
But supply is limited.
What happens next?
Prices go up — not because the merchant suddenly got greedy,
but simply because demand has exceeded supply.
Who caused the price to rise here?
People’s expectations.
Not the merchant.
2. When Supply Drops
Now let’s take a simple, everyday example…
Tomatoes in Jordan — faster than the stock market!
• One day, a kilo is 1 dinar.
• The next, it’s 20 piasters.
Why?
Because demand stays relatively constant…
but the amount of tomatoes in the market changes.
When there’s plenty of supply — prices fall.
When supply drops — prices rise.
Again…
The merchant isn’t the villain here.
They’re simply reacting to the market situation.
Price Flexibility (Elasticity)
An important note:
Not all goods are equally flexible in price.
Some products are highly sensitive to changes — like tomatoes — prices fluctuate quickly.
Others are less flexible — like gold or fuel — they take longer to respond.
And in general…
A merchant’s ability to control prices is extremely limited,
unless the market is monopolized or semi-monopolized.
The Bottom Line
Next time you see your local shopkeeper raising the price of rice…
don’t rush to curse him out.
Maybe it’s not in his hands.
Maybe his supplier raised the price first.
And now, he’s forced to pass it on to you.
The market is bigger than one person.
And prices are a complicated game —
between supply, demand, public expectations, government policies, and merchant margins.
And that’s the truth.
