When a market is in equilibrium, the number of sellers at a given price, by definition, equals the number of buyers. However, if the number of willing buyers is growing at the current prevailing price, while the number of sellers is falling, constant, or growing at a slower rate, the equilibrium price rises and the market is labeled a "seller's market".
Characteristics of a seller’s market, in addition to the tendency for higher prices, include a reduced time on market before the asset or commodity is sold, increased demand for speculative purposes in anticipation of higher prices later, and an increase in the listing price of the assets in anticipation of higher future prices.
This phenomenon of contracted supply and increased speculative demand further exacerbates the seller’s market to the point where an artificial speculative bubble can occur.
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| Seller's Market |
