The law of supply and demand drives traditional economics: The rarer a product, the more a business can charge for it. Conversely, an item in bountiful supply usually commands a lower price because competition drives down its perceived value and businesses must compete on the basis of price. In addition to these commonly accepted considerations, supply and demand also impacts business decisions by influencing what businesses purchase and even making it more or less feasible for a business to use a particular raw material.


When a business has flexibility in the choice of materials to put into a product, it makes sense to use items that are abundant rather than scarce. Having a steady supply of necessary materials also makes ordering and inventory control simpler, allowing a business to get what it needs when it needs it rather than juggling and keeping track of multiple suppliers and investing unsustainable sums in inventory to avoid running out.


Using readily available supplies ensures that a business will not pay too much for materials, enabling it to either increase profits or keep prices low. Conversely, using scarce materials that customers see as valuable by virtue of their scarcity allows a business to charge higher prices. If a business manufactures a popular product and can't keep up with demand, this supply shortfall could also justify raising prices to raise additional revenue and invest in infrastructure that allows the business to increase production.


Choosing to use materials that are abundant allows a business to provide customers with a steady supply of inventory, offering them consistency and predictability. If a business wholesales fresh mushroom pate using rare and expensive wild mushrooms, it can expect to not always be able to provide customers with what they need, even though the business created a demand for the exotic food. The decision to use a more readily available mushroom allows customers to plan their menus around the business's offerings, in turn providing consistency to their customers.


A demand that exceeds available supply provides the basis for a compelling marketing message, influencing decisions about advertising and outreach. Customers who truly want a product but cannot know whether supplies will last can be motivated to take advantage of short-term availabilities. A popular item that is not always available makes a great story, one that may be picked up by the media, providing the basis for subsequent marketing campaigns.