Concepts of Market Equilibrating Process
July 7, 2012, 2012
Market equilibrating process is the method or methods that manufacturers use to sustain a balance between supply and demand grasping equilibrium. Manufactures take into consideration the methods chosen while forecasting techniques, patterns, and strategies that will help them obtain higher profits than before all while each unit sold still equals the amount consumers are happy to pay for an item at a specific point in time. The variables and processes that are considered is the process towards equilibrium. Below are some illustrated graphs to show how the equilibrating process in price relation to the shift in supply and demand works.
In my experience I see Nike do this all the time with their shoes. They sell their sneakers at a certain point in time depending on certain variables like season or certain events that is going on during that time. For example this year is the Olympics so Nike has set out to re-release sneakers worn by NBA players in the past such as the Olympic Jordan’s 6 and 7’s two weeks apart. They also created a Gold Medal Package in different colors for the same style of shoes costing 350 dollars. Sneaker fans also referred to as sneaker heads are willing to pay any amount for these shoes because they will never probably see them again for another couple of years to come. They have done a real good job at limiting the amount of shoes will be released causing pandemonium in store lines in some cases. This relates to concept of high demand and limited supply. Nike limits the supply of the shoes because they know there will be a high demand causing store owners to sell the shoes at a high price to make even more profit.
With this being said it can be said the market does not have an equilibrium because of the quantity of the product supplied to the consumer does not meet the demand of...
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