Conversely, when demand goes down, there is downward pressure on prices. Other market forces, such as changes in supply, may increase these effects or counteract them. This seems complicated, but it happens in our economy every day for almost every item that is sold or bought in the marketplace. One example would be the stock market. Fluctuations in price show that a marketplace is working to correct itself when supply and demand are out of balance.
Prices differ from one market to another because each has different market forces at work.
The price in one area will not be the same as the price in another area, unless both areas have the same supply, demand and competition factors. Let's compare prices in San Francisco and Los Angeles. Although San Francisco prices have sometimes been lower, they are usually higher than Los Angeles prices. The fact that different locations have different prices is evidence that competitive marketplace forces are at work. For instance, Los Angeles has significantly more gasoline stations for each 10 square miles than San Francisco.