Market Equilibrating Process
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Market Equilibrating Process
The market equilibrating process is where quantity demanded equals quantity supplied; the market is considered balanced (McConnell, 2009). In other words, buyers and sellers agree on both price and quantity. Competition between buyers and sellers drives the market to the state of equilibrium (McConnell, 2009). A personal experience with an equilibrium market would be when the Miami Heat traded for Shaquille Oneal. Prior to the start of the 2004 National Basketball Association (NBA) season, the Heat’s season tickets were moderately priced compared to several other NBA teams. Moreover, the team had an abundant supply of tickets available for purchase. However, once the trade was made for Shaq, there was a demand increase for Heat tickets at an escalated price that consumers were willing to pay and the Heat organization was willing to sell at the increase price. In this situation, the market benefited both the buyer and the supplier. On the other hand, several years removed from winning the NBA championship, the market did not remain the same because of changes in the demand for Heat tickets. The changes of demand were attributed to several reasons. A primary reason was the turn in the economy, fans are not purchasing tickets. Also, the product was not good the watch, the team came in last place within their division. As result of the plethora of issues, the Heat organization has a surplus of tickets to sell. Even though, the Heat organization has not raise their ticket price there still is not a demand for Floridians to purchase tickets.
Reference
McConnell, C. B. (2009). Economics: Principles, problems, policies. New York, NY: McGraw Hill Irwin.
The market equilibrating process is where quantity demanded equals quantity supplied; the market is considered balanced (McConnell, 2009). In other words, buyers and sellers agree on both price and quantity. Competition between buyers and sellers drives the market to the state of equilibrium (McConnell, 2009). A personal experience with an equilibrium market would be when the Miami Heat traded for Shaquille Oneal. Prior to the start of the 2004 National Basketball Association (NBA) season, the Heat’s season tickets were moderately priced compared to several other NBA teams. Moreover, the team had an abundant supply of tickets available for purchase. However, once the trade was made for Shaq, there was a demand increase for Heat tickets at an escalated price that consumers were willing to pay and the Heat organization was willing to sell at the increase price. In this situation, the market benefited both the buyer and the supplier. On the other hand, several years removed from winning the NBA championship, the market did not remain the same because of changes in the demand for Heat tickets. The changes of demand were attributed to several reasons. A primary reason was the turn in the economy, fans are not purchasing tickets. Also, the product was not good the watch, the team came in last place within their division. As result of the plethora of issues, the Heat organization has a surplus of tickets to sell. Even though, the Heat organization has not raise their ticket price there still is not a demand for Floridians to purchase tickets.
Reference
McConnell, C. B. (2009). Economics: Principles, problems, policies. New York, NY: McGraw Hill Irwin.