Which term describes the relationship where the price reflects both the supply of properties and the demand from buyers?

• A. Scarcity
• B. Demand Curve
• C. Supply and Demand
• D. Market Equilibrium

Answer: (C)

The price in a real estate market is determined by how much property is available (supply) and how much buyers want to buy (demand). When demand is high and supply is limited, prices rise as buyers compete for fewer homes. When there’s plenty of inventory and less buyer interest, prices tend to fall. This ongoing interaction between what sellers are willing to offer at various prices and what buyers are willing to pay at those prices is described by supply and demand. Scarcity refers to limited resources in general, the demand curve shows how quantity demanded changes with price (a map of one side’s behavior), and market equilibrium is the specific point where the quantity supplied equals the quantity demanded, not the overall relationship that determines price.