...Market Equilibration Process Paper Your Name ECO/561 June 9, 2014 Instructor Name Market Equilibration Process Paper Many beef lovers will feel the impact of high beef prices this year, as they prepare for the busy grilling season. The United States cattle ranchers reported 2014 to be the worst cattle shortage in more than 61 years. The shortage is due to the severe drought conditions stretching over much of the southwest United States. In addition to the drought conditions, the historically low temperatures also contributed to the shortage as the cattle were not able to gain weight. The lack of weight gain prevented the cattle from going to the meat processors. Even through the drought, some cattle ranchers experienced large amounts of snow pack, which made transporting herds to the processors impossible. McConnell, Brue and Flynn (2009) define the Law of Demand as, “A fundamental characteristic of demand is this: Other things equal, as price falls, the quantity demanded rises, and as price rises, the quantity demanded falls. In short, there is a negative or inverse relationship between price and quantity demanded. Economists call this inverse relationship the law of demand.” (p.47) Additionally, McConnell, Brue and Flynn (2009) define the Law of Supply as, “As price rises, the quantity supplied rises; as price falls, the quantity supplied falls. This relationship is called the law of supply.” (p.51) In relationship to the cattle shortage, the laws of supply and demand...
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...ECO 561 WEEK 2 COMPLETE A+ Graded Tutorial Available At: http://hwsoloutions.com/?product=eco-561-week-2-complete Visit Our website: http://hwsoloutions.com/ Product Description PRODUCT DESCRIPTION ECO 561 Week 2 Complete Learning Team Deliverable The team debated over three different cost or expense concepts in business economics. The first topic dealt with fixed and variable costs and how these costs related to supply and demand. Fixed costs are costs that will not vary regardless of the changing outputs and paid out even if the outputs are zero. On the other hand, variable costs are the cost that will vary based on the levels of outputs produced by the business and those costs changes directly with the level of outputs. Items such as raw materials and most labor cost are variable because they can change over time (McConnell, Brue & Flynn, 2009). Understanding both the fixed cost and the variable cost would help business get a better handle on the total cost associated with operating a business. In business economics, cost and knowing the effecting controllers, allows managers to adjust accordingly. Businesses overall, need to know where money is going, when and where they need to cut expenses, and when they need to produce more to offset the cost. As the demand for a product or service increase, the company would need to understand when it should increase its supply for that product or service. It seems simple, but there is much more that goes into increasing...
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...Market Equilibration Process Paper Economics ECO/561 March 18, 2015 Market Equilibration Process Paper In this paper I will describe the “Market Equilibration Process” which identifies the basic condition in which all of these economic forces are balanced. There are many variables that enable these forces to find this equilibration; the primary driver is supply and demand. The law of demand is when your customers purchase more of the goods as the price decreases and less as the price goes up. This is driven primarily through social trends, followed by price and personal choice. The law of supply is what is currently available to market, many producers will increase supply as demands increases. The efficient markets theory basically states that it is impossible to beat the market, as it is always within the means of all relevant information. All of these theories begin with surplus and shortage which occurs in all markets with all market goods. When there is a surplus the price comes down and opposite when there is a shortage the price will increase. In essence what the “Market Equilibration Process” theory suggests is that any product or service trends toward what the market is willing to pay based on demand and supply. I will apply this theory in home values and availability, because of high demand real estate has seen an increase in the price of most homes for sale especially when supply is low. In many communities throughout the State of California families have been...
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...Market Equilibration Process Paper Adekola Ayantola ECO/561 November19, 2012 Market Equilibration Process Paper Market equilibration process in economics is the ability put the supply function and demand function together to obtain market equilibrium. The Demand and supply principle find the price and the output of the item in question. In a situation in which the supply quantity is fixed and assigned the evaluated function of the demand at that particular price will determine the supply price. The market equilibration provides opportunity for business organization to adapt to various changes that happens in the market in their field, to guide the management in adjusting to the demands by adjusting the supply to create market equilibrium, and this will enable the producers and purchasers to be on the same par on price and products. For equilibrium to exist there must be a demand of the product or products or services. There must be willing buyers with available resources to purchase the products or services at the agreed price. Once the need has been established the products can be produced or developed. The product is supplied to the market at the price the consumer is willing to pay, and this thus creates market equilibrium. In a situation in which there is an imbalance in one side the equilibrium is affected, and there is a shift more to once side. In a situation of this nature there may be a shortage of supply and may cause price increase that may result in competitors...
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...Running Header: Market Equilibration Process Paper Labor Demand and Supply Economics ECO/561 April 21, 2011 Running Header: Market Equilibration Process Paper Introduction The purpose of this paper is to relate the concepts of the market equilibrating process to a prior real-world experience occurring in a free market. The market equilibrating process will be explained and the following components will be considered in the explanation; Law of demand and the determinants of demand, law of supply and the determinants of supply, labor demand and supply. Law of Demand and the Determinants of Demand According to Economics: Principles, problems, and politics, a fundamental characteristic of demand is this: Other things equal, as price falls, the quantity demanded rises, and as price rises, the quantity demanded falls. In short, there is a negative or inverse relationship between price and quantity demanded. Economists call this inverse relationship the law of demand and the determinants are the “other things equal” in the relationship between price and quantity demanded (McConnell, Brue and Flynn, 2009). Law of Supply and the Determinants of Supply According to Economics: Principles, problems, and politics, the law of supply states that as price rises, the quantity supplied rises; as price falls, the quantity supplied falls and the basic determinants of supply are, resource prices, technology, taxes and subsidies, prices of other goods, producer expectations, and the number...
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...Market Equilibration Erick T. Bertram ECO/561 May 19, 2011 Dr. David Booker Market Equilibration The market equilibration process occurs when the market can reach and maintain a balance between the supply and demand. It also includes what manufacturers take in consideration of what can help lead their firms so they can maximize profits with units sold and match what consumers are willing to spend on an item. This will lead to market equilibration. With family, finances must have equilibrium to maintain peace and happiness. Prior to planning vacations, making major purchases there are several options to consider. What should be done is assess the family finances. Families need to account for all income during each pay period. Then figure what is going out to pay monthly expenses like rent, electricity, water, credit cards, cable, cell phones, and include putting money into the family savings. This information will help to determine the families’ income so they can plan the next major purchase or family vacation. If planning a vacation there needs to be consideration for the total cost and what is available to spend. Some simple reasons to observe the law of demand, first is there a substitution effect can the family find a similar vacation at a lower price, and second is the real income effect, has there been a change in a families purchasing power. This is true in today’s current economy. When there is a change in determinants of demand in the family example; income...
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...Market Equilibration Process Paper ECO/561 June 7, 2012 Dr. Jill Trask Market Equilibration Process Paper Market equilibration can be accomplished when market price established through competition so the amount of good bought is equal to the number of goods sold. Supply and demand would be factors to change the market equilibrium. In the oil industry market equilibrium is determined by the cost of oil, competitor’s prices, and technology. “As a price falls, the quantity demand rises, and as a price rises, the quantity demanded falls” (McConnell, Brue, & Flynn, 2009, p. 47). Consumers travel constantly to go to work, school, or vacation. This travel requires the use of some form of transportation whether it is train, airplane, or automobile. The transportation modes use a form of fuel to move the vehicles. Certain periods increase the demand for fuel or decrease the demand, for example holiday weekends would increase the demand. When the price of fuel increases a traveler will see an increase in an airline ticket or a train ticket. If the prices for the airline or train ticket are too much the traveler may choose to drive instead to keep their cost down, When the fuels prices rises so does the commuter train tickets, causing some commuters to find alternate ways to work, such as carpooling. As the fuel prices decrease so do transportation costs allowing individuals to travel more often in their choice of transportations rather than the economical choice. As...
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...Market Equilibration Process ECO/561 January 27, 2014 Warren Matthews Market Equilibration Process In economics, supply and demand is one of the most essential concepts and the foundation of the market economy. Consumers demand a product, and producers in the market supply the product to the best of their ability. When shifts in the equilibrium between supply and demand occur, the players in the market (sometimes unknowingly) work together to balance the two. When exploring the market equilibration process surrounding propane gas, it is evident that the abnormally frigid temperatures throughout the Midwest and Northeast, in combination with the long wet fall, are creating an unbalance. The Law of Demand The law of demand according to McConnell, et al (2009) states, “…Other things equal, as price falls, the quantity demanded rises, and as price rises, the quantity demanded falls,” (p. 47, para. 3). However, looking more closely at the case involving propane will prove the importance of understanding the phrase "all things equal". Some factors influence the law of demand. Those factors include (1) consumer preferences, (2) the number of active buyers, (3) consumers’ incomes, (4) the prices of related goods, and (5) consumer expectations,” (McConnell, Brue, & Flynn, 2009, p. 48, para. 4). Focusing on the number of active buyers in the market in combination with consumer expectations allows one to see how these factors increase the demand of propane. One can reasonably...
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...Market Equilibration Process Jeremiah D. Wood ECO/561 April 19, 2014 Professor John Lindvall Market Equilibration Process Economic equilibrium is defined as a condition or state in which the economic forces are at a balance. In this particular discussion, one will discuss equilibration, the process of moving between two different points that is affected by a change in demand or supply. One will cover how a specific world event, Hurricane Katrina, caused home prices in Baton Rouge, Louisiana to fluctuate between two equilibrium states. Also to be covered is how the process of said movement occurred using the behaviors of both supply firms and consumers. In the late summer of 2005, Hurricane Katrina bared down on the City of New Orleans and the surrounding areas. This storm caused a surge that caused the storm levees to break that in turn, flooded the City of New Orleans and took most of the city’s housing with it. Because of the destruction, about two hundred and fifty thousand people were relocated to nearby Baton Rouge, making it the largest city in Louisiana. Let us start the discussion by stating that the average price of a single-family home in Baton Rouge before Katrina was one hundred thirty thousand dollars, shown by point A on the graph (O'Sullivan & Sheffrin, 2002). With the explosion of the population, the average price jumped to one hundred and fifty six thousand dollars within six months, point B, and the market shrunk from three thousand six...
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...Market Equilibration Process Paper David Campbell ECO/ 561 May 6, 2013 Professor Maria H. Ramjerdi Market Equilibration Process Paper There are many things that come with learning the concepts of supply and demand. It for one helps many people who are corporation owners have to the capability to make best of their income. The Market Equilibrating Process to us all is “the interaction of market demand and market supply adjusts the price to the point at which the quantities demanded and supplied are equal”, known as equilibrium price. Also known is that equilibrium quantity relates to corresponding quantity. A change in either demand or supply changes the equilibrium price and quantity (McConnell, Brue, & Flynn, 2009). Throughout this paper I will not only speak on market equilibrating process but also give my experience. The market equilibrating process is experienced many times through people’s lives but for me I see most examples through my finances. If looking at a supply curve, you would see my earnings and revenue. My amount outstanding and disbursements would be look at as my demand curve. The moment when my income reaches the same amount as my debts then that is known to be my equilibrium point. The equilibrium point is where I see the amount I am able to pay for with my balance due and income. Throughout understanding this concept I have noticed that there are many different things that can affect the curve for supply and demand. One thing that damages...
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...Marketing Equilibration Process Paper ECO/561 Marketing Equilibration Process Paper The market equilibrating process is the method or methods in which manufacturers tend on maintaining a balance between supply and demand reaching equilibrium. This is help by using competition between and among buyers and sellers sets off equilibrium process. For example firms with excess inventories cut prices to try to undersell their competition. As the price falls, quantity demanded rises, and quantity supplied falls. Buyers competing with one another for goods in short supply bid up price to try to capture some of the good as price goes up, demand falls and supply rises (McConnell, 2009). I think looking at an electronic device is a perfect example. Take the IPhone, the new versions are always in demand but the old versions are easily replaced. When AT&T had a monopoly on the IPhone other companies tried to put out products like the droid or update the blackberry so that it was able to compete with AT&T. Now that AT&T does not have the sole contract for this device there is still a demand but it is across the board and not solely with one company. The law of demand also affects the market equilibrating process. The law of demand in theory says that there is a negative relation between price and quantity demanded. For example if price goes up, quantity demanded goes down; if price goes down, quantity demanded goes up (McConnell, 2009). This can be seen when an IPhone was brand...
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...Market Equilibration Process ECO 561 October 16, 2012 Market Equilibration Process Recognizing equilibrium in a market is equivalent to recognizing equilibrium in people’s private lives and encounters. In the course of suffering from job loss or move to a new profession, people encounter equilibrium. With new jobs comes new lavishness. Cutbacks come during the loss of a job until finances improve. The current economic situation causes a state of disequilibrium for people. People are losing their homes by going into foreclosure, but simultaneously acquiring credit card debt. This research will provide information on the housing market equilibrium. It is imperative to understand the supply and demand of the housing industry. A few years ago, the price of homes were increasing at such intensity that the demand surpassed the supply. The manufacturer of homes went ballistic and individuals were obtaining trouble-free loans. People were turning over properties anticipating the market to continue to blast. As the market exploded, the market soon collapsed, and the price of homes declined. Investments in the market ceased as supply exceeded the demands and prices dwindled severely. There was a downpour of small sales and foreclosures. Families lost their homes and started renting. Adjustments in the cost of homes were more significant to the equilibrating procedure than the reduction in the price. Supply One can define supply as the measure of a product that a manufacturer...
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...Market Equilibration Process Dee Fullington University of Phoenix ECO/561 Kathleen Crump May 2, 2011 Market Equilibration Process The last time I bought fresh produce, it was sticker shock. I decided to do a little research into why produce is so expensive. I discovered I bought the produce in the United States grower’s off-season. Produce has elevated prices in the off-season because of imported produce into the United States from foreign companies that has opposite growing seasons. Another reason for the shock is the cost of producing fresh produce. The cost has risen at approximately 4% annually since the beginning of the 2000s. Reasons for the elevated costs of growing produce is linked to new regulations for land use, importing costs and regulations, weather, irrigation, and technology. Along with the above reasons, market information for supply and demand will also help determine quantities and price. Market information will tell what the consumers buying trends are, if they are buying a substitute product at a reduced price or if the consumer is buying the product at the current price. Wholesalers will know what the demand for consumers and producers are. Market information informs growers of the type of crops the consumer demands, the quantity, and the season. By studying the market information the growers can plan the types of crops they plant and when they plant. The market information will also inform the growers of predictable and unpredictable changes...
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.... Market Equilibration Process Kumberly Milan ECO/561 July 13, 2015 Harry Dzakwasi Market Equilibration Process A market is a group of people that sell products to consumers who buy the products. Usually within a market some form of competition is presented and supply and demand must be considered. Demand is how much product or services a consumer is willing to purchase and supply is the labor or materials provided for the consumer to purchase ("Basic Economics ", 2007-2015). In relation to supply and demand some business owners efficient market theory to determine the rise of prices. According to Fama (2004-2015) “the efficient markets theory is a proposition that the prices of stocks, bonds, and other securities fully reflect all available information at any point in time” (Behind This Chicago Idea). With efficient markets theory business are allowed to increase prices of products and labor based on future predictions. If the business owners suspects any changes that will affect the equilibrium they can increase prices as needed. Business owners must make sure there is a balance or equilibrium between the supply of services as well as materials and the demand for these services and materials. If the business owners have a surplus of supplies they may find it difficult to sell all products or services and may have to lower prices of these products and services until they reach a state of equilibrium. If there is an excess of demand the business owner will find that...
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...Market Equilibration Process Paper Marlene Toadlena ECO 561 March 02, 2015 Genevieve Turano Market Equilibration Process Paper During Hurricane Sandy, the city of New York experienced price gouging by merchants due to the increase in demand for many products. The supply is limited; therefore, many merchants decided they would be able to capitalize on the needs of the consumers. However, during the storm, public transportation was limited, and the buses weren't running due to the cost of fuel, trains, and the subways were at a standstill due to the flooding. Uber, a car service company, came into the picture for transportation. This paper will show how the demand and supply of transport services were affected by Hurricane Sandy, during a time of disaster, and how the consumers reacted to the changes in prices. The Law of Supply and Demand Maddalena (2012) states, “It is all a matter of supply and demand and what happens when one or both are disrupted from their normal point. When a market is functioning normally supply and demand intersect at a point (called the equilibrium point) which bases the best price that the market is willing to pay as well as the best quantity that the market will provide. When a market is disrupted due to some external event, supply and demand can change causing a new equilibrium point and a new price and quantity” (Maddalena, 2012). With the events taking place during Hurricane Sandy, the Uber transportation company took advantage of the consumers...
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