Click on the Pearson Education logo to find out further details of the Economics books they publish and the supporting resources available to adopters of the books. The following passage refers to the operation of a free-market economy. Demand and supply are brought into balance by the effects of changes in price. In either case the adjustment of price will ensure that demand and supply are brought into equilibrium, with any shortage or surplus being eliminated. The price of the good rises.
Firms anticipate that the price of the good is about to fall.
The diagram below shows the demand for and supply of petrol. A rise in tax on petrol and a reduction in tax on cars.