Market Equilibrating
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- Date Submitted: 08/04/2010 05:10 PM
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Running Head: MARKET EQUILIBRATING PROCESS
Market Equilibrating Process
ECO/561
University Of Phoenix
January 14, 2010
Market Equilibrating Process
Economics is the study of production, consumption, and distribution of goods and services. Economics allows a broader look at the use of scarce goods among a society of unlimited wants by measuring supply and demand. Price and quantity is a measurable value that is needed in order to evaluate the flow of supply and demand. The concept of supply and demand illustrates how prices fluctuate as a result of a supplier’s product availability at a certain price and the willingness and purchasing ability of consumers at a certain price.
Demand Shift
I recently moved from Colorado to Tennessee because of my husband’s employment. As a result of relocating, I gave up a lucrative job working for a retail company based in Los Angeles, California leaving me unemployed when my husband and I moved to Tennessee. While working in Colorado, I was accustomed to shopping at higher priced stores, eating out on a more frequent basis. With a higher income I was able and willing to purchase more, which increased my demand for consumer goods and services. When I became unemployed in Tennessee my demand for goods and services decreased, which meant that I was unable to shop at the same stores in which I was accustomed. My experience was an example of the effect that income has on consumer demand. As a result of my unemployment, I shifted my demand from higher end stores to outlets.
The theory of the income effect “indicates that a lower price increases the purchasing power of a buyer’s money income, enabling the buyer to purchase more of the product than before.” (McConnell, 2009, P.47)
Supply
An example of supply would be the various products each store was willing able to make available for a sale at each of a series of possible prices (McConnell, 2009).
I shopped outlets because outlets carried the overage...
Market Equilibrating Process
ECO/561
University Of Phoenix
January 14, 2010
Market Equilibrating Process
Economics is the study of production, consumption, and distribution of goods and services. Economics allows a broader look at the use of scarce goods among a society of unlimited wants by measuring supply and demand. Price and quantity is a measurable value that is needed in order to evaluate the flow of supply and demand. The concept of supply and demand illustrates how prices fluctuate as a result of a supplier’s product availability at a certain price and the willingness and purchasing ability of consumers at a certain price.
Demand Shift
I recently moved from Colorado to Tennessee because of my husband’s employment. As a result of relocating, I gave up a lucrative job working for a retail company based in Los Angeles, California leaving me unemployed when my husband and I moved to Tennessee. While working in Colorado, I was accustomed to shopping at higher priced stores, eating out on a more frequent basis. With a higher income I was able and willing to purchase more, which increased my demand for consumer goods and services. When I became unemployed in Tennessee my demand for goods and services decreased, which meant that I was unable to shop at the same stores in which I was accustomed. My experience was an example of the effect that income has on consumer demand. As a result of my unemployment, I shifted my demand from higher end stores to outlets.
The theory of the income effect “indicates that a lower price increases the purchasing power of a buyer’s money income, enabling the buyer to purchase more of the product than before.” (McConnell, 2009, P.47)
Supply
An example of supply would be the various products each store was willing able to make available for a sale at each of a series of possible prices (McConnell, 2009).
I shopped outlets because outlets carried the overage...