The purpose of this paper is to explain the market equilibrating process in relation to my personal experience supported by academic research. The following factors will be included in my explanation: law of demand and the determinants of demand, law of supply and the determinants of supply efficient markets theory and surplus and shortage. Market Equilibrating Process
Not since the Great Depression of the late 1920’s that carry over into the 1930’s has the United States experience an economic downfall like our current economy recessions that we are recovering from that started in 2008. Understanding what an economic depression is will help individuals deal with their own economic experiences. Economics is the social science that examines how individual’s institutions and society make optimal choices under conditions of scarcity, (McConnell, Brue, Flynn, 2009).
The two stakeholders that contribute to the market equilibrium process are the supply from the producer and demands from the consumers. The equilibrium process is equal when the producer and consumer needs are balance. Producers and consumers competition off sets the equilibrium process, producers with larger inventories are force to decrease their prices to undersell their competition. Consumers benefit from this because; more choices are available to fill their desires. When a price falls, quantity demands increases and quantity supplies decreases.
The Essay on Market Structure / Supply & Demand
Monopoly – one person or company dominates provision of a particular product or service, in the absence of competitors. Consumers do not have a choice for provision of the product in question. A monopoly can ‘call the shots’ on their product (price, availability etc.) as there is no alternative on offer to consumers. Monopolists tend to produce a limited number of product which are then sold at a ...
Efficient Market Theory Market rise and falls sometimes analysis are right in their prediction, other times they are wrong. According to Fama “An “efficient” market is defined as a market where there are large numbers of rational, profit-maximizers actively competing, with each trying to predict future market values of individual securities, and where important current information is almost freely available to all participants … on the average, competition will cause the full effects of new information on intrinsic values to be reflected “instantaneously” in actual prices. My understanding of this is that prices fluctuate because of supply and demand and that economic predictions from current prices cannot always be used to calculate for future prices. Personal Experience
My personal experience in relation to the market equilibrating process is like a roller coaster ride. Ups and downs with twist and turns, fills my life, some up are fulfilling just as some downs are fulfilling. Trying to find a balance on the roller coaster ride of life is difficult, when society determines if my economic resources are up or down. Often my wants exceeds my income, the choice of to purchase or not to purchase becomes easy when this happens. My choice of not to purchase has been influence by the suppliers price. Sometime as a consumer I must accept the supplier’s price and not my desires. For example, gasoline prices are at nearly $4.00 per gallon, I have a choice of to purchase or not to purchase. However; I have responsibilities that require transportation to meet my responsibilities I have to purchase the gasoline. Another personal experience of mine is choosing where to retail shop for a bargain. Looking through sales ads for the best price from stores like Wal-Mart, Target that offer the same product at different price. As a consumer I want the best price, I benefit from supply and demand when competitors are competing. Conclusion
In economics producers and consumers are the main stakeholders in the equilibrating process. The market equilibrating process has highs and lows at different time during the process benefiting each stake holder. Understanding the equilibrating process will aid consumers when to purchase products to benefit their personal desires.
The Essay on Market Equilibration Process Paper 6
... Market Equilibration Process Paper Market equilibrium is the point in which industry offers goods at the price consumers ... 07). Market Equilibrating Process Paper. StudyMode.com. Retrieved 07, 2010, from http://www.studymode.com/essays/Market-Equilibrating-Process-Paper-359014.html (2012, 03). Market Equilibration Process Paper. ... offered. In this case, consumers will be able to purchase as much of a ...