...Market Equilibrating Process Janica A. Francis ECO/561 May 6, 2013 George Sharghi, Professor There are three players in the market equilibrating process, the Sellers, the Market and the Buyers. The Sellers are the makers, the producers of a product. The Market is the enabler, as it provides venues for the seller’s products to be view and sold by the buyers, the most important player. The Buyers, also known as the consumers, purchase the products marketed in the market at a price that is agreeable to all parties. Competition amongst the seller and buyers initiates the equilibrating process without either participation; the equilibrium process cannot be triggered. The Market Equilibrating Process The business dictionary defines market equilibrium as the current place in which an items supply matches the items demand (Business Dictionary, 2013). Since there is neither surplus nor shortage in the market, price tends to remain stable in this situation. The market equilibrating process is the procedure that suppliers use to reach equilibrium by maintaining a balance between supply and demand. McConnell defines supply is the schedule of quantities of a good and service that people are willing and able to sell at various prices and demanded is the quantities of a product that will be purchased at various possible prices (McConnell, 2009). The consumer’s demand of a service or good and seller’s...
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...Market Equilibrating Process ECO/561 - Economics , Instructor This paper will explore the market equilibrating process and relate this process to a personal experience that has occurred in my life. According to the assigned reading, the equilibrium price for a product is the price at which the demand and supply curves intersect. In competitive markets, prices that are higher than the equilibrium price will result in a surplus and the market price will fall. When the market price is lower than the equilibrium price, a shortage will exist and the market price will rise. The equilibrium price is stable under existing demand and supply conditions. At equilibrium, no tendency for price to change is expected. Changes in supply or demand will cause predictable changes in both the equilibrium price and quantity. (McConnell, Brue, & Flynn,2009). To find market equilibrium, the two curves are combined on one graph. The place of meeting point of supply and demand indicates the equilibrium point. Unless interfered with, the market will remain at this quantity and price. At the point of connection, sellers and buyers see eye to eye on the quantity and price. Relating this process to my personal life experience, I look at the housing marketing. I worked for five years as a licensed Real Estate Agent. When I started in the business, it was booming. It was definitely a seller’s market. The demand was high for mega houses, condominiums and investment properties...
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...Market Equilibrating Process Student Name ECO/561 Date Peter Oburu Market Equilibrating Process Market equilibrium is defined as a state where the quantity supplied matches the quantity demanded (McConnell, Brue, & Flynn, 2009). In case where there is lack of equilibrium a business can be have a surplus or the buyers could face a shortage. The process in which the market adjust to the demands of market buyers and supply of market sellers is know n as the market equilibrating process. If the market price of a good or service is set above market equilibrium price, the demand will be less than the supply and the net effect will be a surplus. On the other hand, the market price of a good or service is set below the market equilibrium price, the demand will be greater than the quantity supplied and the net effect will be a shortage. For a business either of these scenarios can be detrimental, therefore it is very important that a business owner set their price at the market equilibrium, which is the ideal price for both business (suppliers) and the consumers. This paper provides an example of how the market equilibrating process works for a martini lounge. The paper proceeds as follows; first we describe ... then we highlight ... and finally we conclude that ... As the owner of a restaurant, I have to pay very close attention to pricing in an effort to ensure a steady flow of customers and to build profitability. The type of restaurant I own can be classified and...
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...Market Equilibrating Process XXXXXXXX ECO/561 March 4, 2013 XXX Market Equilibrating Process The market equilibrating process is pertinent to all industries. When supply is more than the demand, there is an imbalance. To counter this imbalance, industries work to increase the demand. If the demand gets equal to the supply, there is market equilibrium. To better elaborate this, I would like to discuss about the proposal process. I work in the federal government consulting industry and part of my job also involves in responding to Request For Proposal (RFP) from the government. One section of the response caters to finances, specifically surrounding the amount of money with which the concerned job can be accomplished. Determining the price for the job is what I am going to use for this week’s paper. Law of Demand The major demand determinants in this case include the total budget allocated by the government for the specified work called Government Cost Estimate (GCE), the price quoted by competing vendors, and the total number of competing vendors. If the proposal submitted by my company is within the acceptable range of the government, we are called for subsequent meetings and asked to submit the Best And Final Offer (BAFO). This offer contains the final price that we can accommodate to get the work accomplished. There have been cases when the BAFO submitted...
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...Market Equilibrating Process This paper discusses the relationship between demand and supply, market efficiency, and how these element effect equilibrium quantity and price. In a market environment, supply, and demand interact with one another in local, national, and international market. Demand is the quantity of a product desired by customers, “i.e.” according to McConnell “Demand is the amount 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” (2009, p. 46). Supply refers to how much of certain goods the market can offer. Demand and supply control the quantity of a product to be sold at given price. When intended price of buyers and sellers matches, the price is said to be at equilibrium. Market Demand and Supply Price Demand Quantity Increase in Demand Quantity Supply Increase in Supply $6.00 20 40 200 240 $5.00 40 60 150 180 $4.00 70 100 100 120 $3.00 110 140 75 90 $2.00 175 200 40 55 $3.00 110 140 75 90 $2.00 175 200 40 55 Fig 1 As explained in Fig 1, price is controlled by supply and demand in the market place. Fig 1 shows current state of market equilibrium at 3.50$ where supply and demand matches. At any above-equilibrium price, quantity supplied exceeds quantity demanded. At $4 price, sellers will produce more quantity of products, than buyers will purchase. The result is a surplus (or excess supply) of products. Surpluses drive prices down. Any...
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...THE MARKET EQUILIBRATING PROCESS The market equilibrating process is the technique in which producers use to maintain a balance between supply and demand reaching equilibrium. The methods that these producers have deliberated on, while preparing techniques, patterns and strategies which will lead to a maximization of profits as the units sold mirrors the amount that customers are prepared to pay for an item at any given time. This process and variables taken into consideration is the process on the way to equilibrium ("What Is Market Equilibrating Process"). This process is also referred to as a circumstance where the supply of a product is precisely equivalent to its demand. As a result, the price remains steady in this situation as there is no surplus or shortage is reflected in the market. The market has reached equilibrium as the supply and demand curves interconnect. At this point, quantity supplied and the quantity that is demanded is equivalent. Surplus and shortages are detected if the market price is higher than the equilibrium price and the quantity supplied is greater than quantity demanded therefore creating a surplus then the market price will fall. For example, retailers often have surplus of inventory that cannot sell therefore the prices are reduced and placed on sale. Since the price has decreased, the product’s quantity demanded will increase until equilibrium is obtained and as a result, surplus drives price down. Also, if the market price...
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...Market Equilibrating Process Paper ECO/561 February 16, 2011 Market Equilibrating Process Paper Within any process, the achievement of market equilibrating is imperative in the business world. According to McConnell, Brue, and Flynn (2009), “Market equilibrium is a situation where the supply is equal to the demand”. The goal of many organizations is to create and continue to create market equilibrium. In this paper market equilibrating, law of supply and demand and inelasticity vs. elasticity will be furthered discussed. Law of Demand and the Determinants of Demand The quantity demanded falls when the price increases. Whereas, the quantity demanded rises when the price falls. According to McConnell, Brue and Flynn (2009), “Demand is a schedule or curve that reveals the various amounts of a product that consumers are willing to purchase at each of a string of potential prices during a specified period of time. Various prices are selected for a particular product in different quantities for the product. The law of demand is the correlation between the demand of quantity and price. For example, a designer coat is retailed for $200 at a department store in the early winter season. During an after Christmas sale, the coats are reduced by 50% to a cost of $100. This sale created more consumer purchases because the price was reduced. As the price went down, more consumers purchased the shoes. The law of demand was utilized throughout this sale process. Law of Supply...
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...The Ipad introduced this year with price start from $499(Glenn, 2010). Ipad is ttuched screen mobile laptop with no keyboard and high screen resolution. Ipad is also a e-reader with color screen. Kindle devoted exclusively to digital books however the Ipad has millions of added features and applications in addition to e-reader. Customer tastes has been change to prefer the new Ipad over the Kindle. This change in market force Amazon and Barnes & Nobles to cut their e-reader device to be under the $200. Kindle now sell with 189 and the Nook price is $199 (RTT, 2010). References Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn , 2009. Economics Principles, Problems, and Policies, Eighteenth Edition Glenn Chapman, 2010. Kindle and Nook cut prices in battle with iPad Retrieved June 23, 2010 from http://newsinfo.inquirer.net/breakingnews/infotech/view/20100622-276934/Kindle-and-Nook-cut-prices-in-battle-with-iPad Kunr Patel, 2010. The Kindle Market Is "Too Small" For iPhone Retrieved June 23, 2010 from http://www.businessinsider.com/the-kindle-market-is-too-small-for-iphone-developers-2010-1#ixzz0rngh2kBD Michael Arrington, 2008. Amazon May Sell $750 Million In Kindles by 2010 Retrieved June 23, 2010 from: http://techcrunch.com/2008/05/14/amazon-may-sell-750-million-in-kindles-by-2010-thats-a-lot-of-kindles/ RTT, 2010 . Amazon Slashes Kindle Price To $189 In E-reader Price War Retrieved June 23, 2010 from...
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...In a seller’s market, buyers must adopt new tools and strategies to compete effectively on a new playing field. Consolidating supplier markets, rising energy prices and the growing demand for raw materials in emerging markets have fundamentally changed the purchasing framework. Suppliers are more powerful than ever, which means buyers must adjust quickly to a new playing field. A.T. Kearney developed The Purchasing Chessboard—a compilation of insights and experience from thousands of purchasing projects performed worldwide—to help procurement professionals master the tools of their trade. The Purchasing ChessboardTM Buying in a seller’s market Since the 1980s, most procurement professionals have operated in a buyer’s market. Using relatively simple tools—RFIs and RFPs, bundled products and services, and multi-year contracts—companies could negotiate from 1 to 3 percent annual price reductions from suppliers. But this “golden age” of purchasing appears to be over. The ongoing consolidation of the supplier market, rising energy prices and the increasing demand for raw materials from emerging markets means more companies are in a seller’s market. And buyers must adopt new tools and strategies to compete effectively on a new playing field (see sidebar: A New Playing Field on the next page). New Strategies in a Seller’s Market In a seller’s market, old purchasing strategies such as pitting suppliers against one another, or simply requesting...
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... in recent years it is evident that the strategy of these two companies has tilted in favor of the Greenfield investments. There are various factors responsible for both Aldi & Lidl in choosing Greenfield investment as a primary market entry strategy. Some of these factors are as mentioned below: Degree of freedom: Greenfield investment involves setting up business in the manner as perceived by the investors. They are free to choose their own suppliers, channel of distribution and so this freedom allowed the two companies to change required strategy whenever required in order to adapt to different market conditions in different countries. This strategy involves few rules, regulations, licensing issues that allowed the company to cash in on the brand name, which means ability to attract new customers with relatively low costs. Resource & efficiency: Since Germany had already been exploited, the companies¶ seeked for ways of acquiring resources at much lower rates. So by choosing this stategy , , would help them to compete in the markets with major supermarkets and hypermarkets as they could drive down the costs of products that would lead to attracting more cunsumers loyalty . This could enable them to maximize their market share. Other Factors: Political developments: the end of communism 1990¶s allowed for privatization and expanding their business in international fields had become much easier as a result,. Technological aspects: Developments...
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...Developing a Rural Market e-hub The case study of e-Choupal experience of ITC B. Bowonder, Vinay Gupta and Amit Singh Abstract ICT has potential to make significant inroads in a traditional agrarian economy like India. Indian agro-sector has been exploiting the benefits to ICT. Innovative ICT application platforms are being created by private sector players in conjunction with local farmers. One such private initiative has been by ITC Ltd in the state of Madhya Pradesh. It has helped the farmers in many ways, such as developing of local leadership, shared ownership of the assets created in this initiative, access to the latest knowledge for the agro-sector, sustainable income levels and skill development for productivity improvement. This initiative from ITC[1] has become a benchmark today in the ICT initiatives in agro-sector. Several best practices can be learned from this initiative, namely: § ease of replicability and scalability § customization to meet the specific local needs and § organizational commitment. The success of e-choupal has heralded a new era in the Indian agro-sector. The work needs to be carried forward and replicated in the other untapped areas. Creating business channels that can create a win-win situation both business and farming community has enormous economies of scope. Once a channel is created it could be used for many products and services as shown in this case study. The main reasons for the success of the platform have been the involvement of...
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...which individuals and groups obtain what they need and want by creating and exchanging items of value. 2. [pic]A distributive system: Marketing is viewed as a process whereby in a democratic society, operating within a free market or mixed economy, there evolves a system of distribution that facilitates transactions resulting in exchange and consumption. 3. [pic]A functional area of management: Marketing is seen as a functional area of management, usually based in a particular location within the organisation, which uses a collection of techniques, for example, advertising, public relations, sales promotion and packaging to achieve specific objectives. 4. [pic]An overall business philosophy: Many firms see marketing as the keystone of their business. Marketing is viewed not as a separate function, but rather as a profit-orientated approach to business that permeates not just the marketing department but the entire business. The central mission of the organisation is seen as the satisfaction of customer requirements at a profit (or, in not-for-profit sectors, at a maximum level of efficiency or minimum level of cost). This is achieved by focusing the attention of the entire organisation on the importance of the customer and the needs of the market-place. 5. [pic]A targeting or allocation system: Marketing is perceived as the way any organisation or...
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... Competitive Strategies: Energizer vs. Duracell By LaShonda Griffin BUS 508- Contemporary Business Dr. Laura Jones November 5, 2012 Abstract The U.S. offers a free market where businesses are able to have free enterprise to open and operate an ideal to provide a product or service to the public. There are many businesses that offer similar products and create competition. Consumers are able to have the options in the marketplace. Energizer and Duracell are two companies that offer similar products to consumers. Energizer has been around since 1986 and has grown into a mutli- billion dollar company within the last decade. Duracell first got started in the 1920’s from two scientists, and finally become a brand in 1964. This paper will discuss the two companies’ background, the competition between the two, and how they will thrive to compete in the market place in future. Energizer Energizer is formerly known as Eveready Battery Company and changes its name in the late 1980’s. By the 1990, Energizer has established their brand and had over 30 percent of the domestic market. They were trailing Duracell by 10 percent, who at that time had 40 percent of the domestic market. Energizer is the manufacturer of dry cell batteries and flashlights, with a full line production of in three major categories: alkaline, carbon zinc, miniature and rechargeable batteries. They produce more than...
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...Session 6 Article Summary—From Scotch Whisky to Chinese Sneakers: International Commodity Flows and New Trade Networks in Oshikango, Namibia by Gregor Dobler Development of new trade networks feeding consumption have developed, influencing the way Africa integrates into the global economy. Dobler analyses different trade networks that link Oshikango, Nambibia to the world through four case studies on Scotch whisky, Brazilian furniture, Japanese used cars and Chinese sneakers commodities. Through the case studies, he exemplifies how there has been a shift from old colonial domination of trade to new manufacturing countries or trade routes, as well as the essential role of migrant entrepreneurs in these routes. The similarity underlying the different trade networks is that while the people involved in them are of different ethnicity or country of origin, they share the same profit-seeking motive and the opportunities in the international system shape them to become successful examples as facilitators of global trade. Another key concept from the article is that of global integration via consumption. As trade booms in the town of Namibia, it invariably fuels consumption in the town and Africa as a whole. Consumption choices are a means of self-expression in relation to the world and more Africans aspire towards commodities that reflect social standing and a ‘better life’. This thus creates new dependencies on the trade networks to fulfill these desires. Scotch Whisky Trade ...
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... With these strong margins RC can afford to use two level distribution to further create demand without the costly expense of additional store fronts. While RC’s brand recognition is strong within the Victoria area, by utilizing distribution methods other than direct retail, RC can increase brand awareness outside the local geographic area. The main detractor of increased wholesale sales is the degradation in margin due to added channels of distribution. Nevertheless, increased revenue by expanded distribution will offset decreased margins. Additionally, by first “testing the waters” through distribution in other markets, RC can better target direct markets in which to serve. Open New Storefronts in Western Canada Roger’s Chocolates should utilize one of their core-competencies of the “retail experience,” to increase penetration in different markets. While opening new stores can be...
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