Usually when the statement is made that price is determined by demand and supply, the one making the statement does not realize the full significance of the effect of prices on demand and supply. Let us assume, as is always the case, a given market price for some particular good on a given day. Producers who are selling their goods advantageously, and they are likely to predominate, will exert themselves to increase the supply. An increased supply at the old price will not be taken. Consequently, sellers will reduce prices, thereby increasing demand. Enough has been said to enable us to make several additional general statements of principles that underlie the relation of the three notions - demand, supply, and price. (1) Demand and supply mutually affect each other through price. (2) Price is the immediate factor in the determination of the volume of demand or supply.