Fiscal and monetary policy are powerful influences on the economy. Technological innovation can create new demand. Other Seasonal factors and weather conditions can affect demand. Competition can stimulate demand and affect pricing. Conditions in the capital markets can affect demand by raising the costs or limiting the amount of financing available for purchases.
Volume is sales in units and price is the financial value paid by the buyer.
They tend to be highest when demand exceeds supply, but in periods of excess capacity prices are usually low. Competition Price cuts are a common form of competition. Price growth is usually limited in industries with intense competition. Inflation Inflation is a general rise in prices throughout the various sectors of the economy. In industries with strong demand or moderate competition, prices often increase by at least the rate of inflation.