Week 2 Market Equilibration Process Paper Revised
Market Equilibration Process Paper
ECO/561
April 23, 2015
Market Equilibration Process Paper
In this paper I will briefly relate some concepts of the market equilibrating process learned from the reading from last week and this week. This will be done by defining the components of the equilibrating process, supply and demand. I will define these components and explain how they work together to come up with the equilibrium price of a real world product like strawberries, for example. At the end of this paper I will have Appendix A, B and C for viewing.
“What does it mean when we hear the term “the market is at equilibrium” with a certain product? This can only be explained by understanding demand and the supply”. “Demand, according to our text is a schedule that shows various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time (McConnell, Brue, & Flynn, 2009)”. “If we look in Appendix A, Figure 1, we see the Demand Curve. This curve explains the law of demand, simply as price fall 's the quantity demanded rises (McConnell, Brue, & Flynn, 2009)”.
“The demand curve only tells half the story because without supply, demand and price are nothing. According to the text, supply is a schedule or curve showing various amounts of a product that producers are willing and able to make available for sale at each of a series of possible prices during a specific period (McConnell, Brue, & Flynn, 2009)”. Similar to the demand curve we look at Appendix A and look at figure 2 this time, showing a supply curve.
“These two curves will shift because of entirely different reasons; some shifts that influence demand would be consumer’s income, tastes, price of substitutes, or price of complementing goods (Mankiw, 1998)”. “ The supply curve will change for reasons like: resource prices, subsidies and taxes, number of sellers, technology, and price of competing goods (Mankiw, 1998)”.
ECO/561
April 23, 2015
Market Equilibration Process Paper
In this paper I will briefly relate some concepts of the market equilibrating process learned from the reading from last week and this week. This will be done by defining the components of the equilibrating process, supply and demand. I will define these components and explain how they work together to come up with the equilibrium price of a real world product like strawberries, for example. At the end of this paper I will have Appendix A, B and C for viewing.
“What does it mean when we hear the term “the market is at equilibrium” with a certain product? This can only be explained by understanding demand and the supply”. “Demand, according to our text is a schedule that shows various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time (McConnell, Brue, & Flynn, 2009)”. “If we look in Appendix A, Figure 1, we see the Demand Curve. This curve explains the law of demand, simply as price fall 's the quantity demanded rises (McConnell, Brue, & Flynn, 2009)”.
“The demand curve only tells half the story because without supply, demand and price are nothing. According to the text, supply is a schedule or curve showing various amounts of a product that producers are willing and able to make available for sale at each of a series of possible prices during a specific period (McConnell, Brue, & Flynn, 2009)”. Similar to the demand curve we look at Appendix A and look at figure 2 this time, showing a supply curve.
“These two curves will shift because of entirely different reasons; some shifts that influence demand would be consumer’s income, tastes, price of substitutes, or price of complementing goods (Mankiw, 1998)”. “ The supply curve will change for reasons like: resource prices, subsidies and taxes, number of sellers, technology, and price of competing goods (Mankiw, 1998)”.
References: Fanpop.com. Strawberry. 10 Interesting Facts About Strawberries. AdChoices for Strawberries, Pittsburgh. Mankiw, G. N. (1998). Teaching The Principles of Economics. Eastern Economic Journal, 24(4), 519-524. McConnell, C. R., Brue, S. L., & Flynn, S. M. (2009). Economics. Principles, Problems, and Policies. New York: McGraw-Hill/Irwin . Appendix A Figure 1 Figure 2 Appendix B Figure 3 Appendix C Figure 4