Markets in the Hands of Mechanism of The Price

The Interdependence of Market

Goods Market:

Demand of good increases if shortage is there then price of that increases therefore supply of good increases and the demand falls until Dg =Sg 

Example: 

when diwali festival comes then  the day before  festivals prices of the items will be increasing. Normally demand for flowers , pooja materials , clothes are increasing .when supply is not covering the demand then price will be increased. By seeing the price more and more will come to supply.

some people will decide not to celebrate diwali and slowly it scaledown and it continues until Dg=Sg

this is know as Equilibrium

Factor Market:

Supply of the good increases and demand of the factor increases if shortage is there the price of factor increases therefore supply of factor increases and demand of the factor decreases until Df=Sf

Example:

Manufacturing company is in equilibrium then the people in it are more happy they don't want to leave the industry as the people outside the industry don't want to go inside