File talk:AS + AD graph.svg
price = production cost + overhead / volume
The price of a good or service is equal to the cost to make it plus management costs divided by the number of units sold. Production costs are the material and labor necessary to produce the product. Overhead costs include costs to manage production of the good or service.
Or, production cost remaining the same, price goes up because management costs go up or sales volume goes down. Sales volume is inversely proportional to price.
https://www2.econ.iastate.edu/classes/econ355/choi/img/mil133.jpg
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