Which factor influences the existence of a seller's market?

A seller's market is characterized by high demand for a product or service while the supply is low. In such a market, sellers have the advantage because the demand outstrips the available supply. This dynamic often leads to increased prices as buyers compete for the limited number of offerings. The scarcity of options compels buyers to act quickly, and sellers can dictate terms more favorably.

High demand indicates that buyers are eager to make purchases, and when coupled with low supply, it creates an environment where sellers can maximize their profits. This situation contrasts sharply with a buyer's market, where the opposite conditions prevail—high supply and low demand—leading to reduced prices and more favorable conditions for buyers.

The other factors presented do not create a seller's market. For instance, high supply and low demand would lead to greater competition among sellers, driving prices down instead. Stable economic conditions could refer to numerous situations, but they do not inherently dictate market dynamics. Additionally, high inventory levels suggest an excess of goods available, further contributing to a lack of competitive advantage for sellers. In a seller's market, the critical factor remains the interplay of high demand against low supply.