Supply and price typically move in which type of directions?

The relationship between supply and price is characterized by an inverse correlation, meaning they tend to move in opposite directions. When supply increases, the availability of goods or properties rises, which usually leads to a decrease in price, as sellers may lower prices to attract buyers in a more competitive market. Conversely, when supply decreases, scarcity increases, often resulting in higher prices because buyers are competing for a limited number of offerings.

This fundamental principle is integral to understanding market dynamics, particularly in real estate investment, where fluctuations in supply levels directly influence property values and market behavior. Recognizing this relationship is crucial for making informed investment decisions and anticipating market trends. The other options do not correctly capture this dynamic; they either imply a direct correlation or do not adequately represent the typical movements of supply and price within market economies.