Who decide share prices in share market?

September 24, 2011

Today i got mail from one of the valuable reader of this blog, (as he always gives feedback about blog and the contents ...thanks for that.) he asked very simple question -
"Who decide share prices in share market?"
And answer for the above question is also very simple in terms of supply & demand.

"The price of a share in the market is decided by the market forces! Market forces here means- demand and supply the more the demand for a share, the more the price of the share and visa versa. ok? Since the supply of shares is limited, which means that a company can only issue shares to match its capital, when the company starts doing well more and more people would want to buy the shares. They will be willing to pay more and this will gradually push the price up."

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