Since the average mix of M&Ms includes only a 10% allocation to blue M&Ms, they’re already a bit scarce. If we then ask everyone who has one of the blue M&Ms to eat one, we’ve decreased the supply of blue M&M’s from 12 down to just six. Supply has now decreased significantly, demand has likely remained at least constant, and the price of blue M&Ms has thus increased yet again.

The exact same behavior is true of stocks. When demand outpaces supply, and there are more willing to buy than able to sell at a current price, price must rise.

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