Cost is actually determined by both the demand and the supply. This is because Amazon hypothetically takes into account their marginal revenue (which comes fro

Cost is actually determined by both the demand and the supply. This is because Amazon hypothetically takes into account their marginal revenue (which comes from demand) in relation to the cost of producing it, in figuring out a price point. Specifically, producing up to the point where MR = Cost. (Sorry for being an econ snob)