Eco 561 Market Equilibrium Process Research Paper
Market Equilibrium Process
Nefertiti McDonald
Eco 561
Professor Somerset
Introduction
In today’s economic culture, there is currently a huge significance in being able to analyze or understand the state of the economy to which we live in. Being that I spend money in today’s market I would like to think that the economic market is stable enough to return back to me in one form or another. One could always tell when a market is at its weakest of points. There are grave numbers of job loss or retention of employees, gas prices continuously rise, financial corruption are more present and recognizable. All of these things play a key role of individuals encountering equilibrium.
Investopedia defines equilibrium as “the state in which market supply and demand balance each other and, as a result, prices become stable” (Investopedia) Recently within the U.S gas prices in some parts of the country went down in pricing to $1.89-$2.24 causing the demand to go up …show more content…
When there are lower prices the demand increase steadily but turns off the need to further supply. “In a free market there will be a single price which brings demand and supply into balance, called equilibrium price.” (Economics Online) Market process equilibrium and equilibrium price are often referred to as being very similar facets used in an economy for survival. At the equilibrium price the exact quantity that producers take to market are purchased in full by consumers, and there will be nothing ‘left over’. This is very similar to market process as it further proves pricing to be efficient because there is neither an excess of supply and wasted output, nor a shortage – the market will close evenly with no gains or losses on either side. This is also a central feature of the price mechanism, and one of its significant
Nefertiti McDonald
Eco 561
Professor Somerset
Introduction
In today’s economic culture, there is currently a huge significance in being able to analyze or understand the state of the economy to which we live in. Being that I spend money in today’s market I would like to think that the economic market is stable enough to return back to me in one form or another. One could always tell when a market is at its weakest of points. There are grave numbers of job loss or retention of employees, gas prices continuously rise, financial corruption are more present and recognizable. All of these things play a key role of individuals encountering equilibrium.
Investopedia defines equilibrium as “the state in which market supply and demand balance each other and, as a result, prices become stable” (Investopedia) Recently within the U.S gas prices in some parts of the country went down in pricing to $1.89-$2.24 causing the demand to go up …show more content…
When there are lower prices the demand increase steadily but turns off the need to further supply. “In a free market there will be a single price which brings demand and supply into balance, called equilibrium price.” (Economics Online) Market process equilibrium and equilibrium price are often referred to as being very similar facets used in an economy for survival. At the equilibrium price the exact quantity that producers take to market are purchased in full by consumers, and there will be nothing ‘left over’. This is very similar to market process as it further proves pricing to be efficient because there is neither an excess of supply and wasted output, nor a shortage – the market will close evenly with no gains or losses on either side. This is also a central feature of the price mechanism, and one of its significant