What is the passage mainly about?

How supply and demand together shape prices (The passage explains that price emerges from the interaction of supply and demand.)

Based on the passage, what would likely happen to the price of umbrellas during a long drought?

It would likely fall, since fewer people want them (Lower demand pushes price down, as the passage says sellers must lower prices when few people want a product.)

In the passage, 'emerge' most nearly means

come into being from something (Prices 'emerge from a tug-of-war,' meaning they arise out of those forces.)

According to the passage, what happens when many people want a product but little of it exists?

The price rises (The text states that when many want a product but little exists, "the price rises": buyers compete, and sellers can ask for more.)

Where Price Comes From: Level 2 Reading Comprehension Questions

Prices are not set by a single person. They emerge from a tug-of-war between two forces: how much of a thing is available and how much people want it. These forces are called supply and demand.

When many people want a product but little of it exists, the price rises. Buyers compete, and sellers can ask for more. When a product is everywhere but few people want it, the price falls, because sellers must lower it to attract anyone at all. Most of the time the two forces pull toward a balance, a price where the amount offered roughly matches the amount wanted.

Comprehension questions