Market Equilibration Process
Jose Jacquez
ECO/561
Prof. Daniel Rowe

Market Equilibration Process
This paper is written to describe a real world experience in a free market highlighting change that occurred in supply or demand as a result of world events that led to the need for a move between two equilibrium states. I will explain the process of how that movement occurred using behavior of consumers and suppliers while using graphs as indicated. Real World experience in a free Market. (Using Supply and Demand, Chap.5), Prior to the 1997-99 economic downturns, Indonesia had made tremendous progress in reducing poverty and food insecurity. Many more people fell into poverty as a result of the economic downturn, the survey indicated poverty headcount increased from 23 million to just under 50 million persons, Tabor S.R. & Sawit M. H. (2001). The author noted that absolute poverty in Indonesia is closely linked to food insecurity and malnutrition. Indonesia policy makers have historically defined food security in terms of the nation’s ability to provide itself with adequate supplies of rice at an affordable price. With such limitation, it is no wonder that people from this region have gone out to include such protein rich food stuffs as bugs and beetles. Large numbers of poor people were involved in rice production efforts to promote higher levels of domestic production capacity hoping to reduce long run poverty. In effort to describe the serious nature of the crisis, in 1998, urban food riots, historically high levels of food imports and surging poverty levels indicated signs that food security systems were badly compromised. The Government’s response to declining food supply’s during this time was to mandate sweeping controls on trade and marketing. Tabor S.R. & Sawit M. H. (2001) The Law of Demand and determinants Faced with widening gaps between