Why umbrellas cost more when it rains
When it pours, everyone wants an umbrella (demand up) but there are only so many (supply limited), so the price climbs. Scarcity, supply, and demand are the tug-of-war that sets the price of nearly everything.
Choices under scarcity
Economics begins with scarcity: we have limited time and money but unlimited wants, so every choice has an opportunity cost — the next-best thing we gave up. Markets coordinate these choices through supply and demand. When demand rises or supply falls, prices climb; when demand falls or supply grows, prices drop.
A price is information
A high price tells buyers to conserve and tells sellers to make more. Without anyone in charge, prices push a market toward balance (equilibrium).