Market Equilibrating Process Paper

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  • Topic: Supply and demand, Economic equilibrium, Economics terminology
  • Pages : 3 (642 words )
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  • Published : July 21, 2010
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Running head: MARKET EQUILIBRATING PROCESS paper

Market Equilibrating Process Paper
Sonia Reyna
University of Phoenix
Daniel Rowe
ECO/561
June 1, 2010

Abstract

Today’s society must study social mechanisms, political realities, and social customs to coordinate its wants, needs, and desires. Mexico has one of the most unstable economies. The government in Mexico announced the price increase of corn tortillas. The price of the product went up 14% last year. In supply demand, prices are affected by the demand of the resources and the ability to meet the demand. If there is a high demand for resources and the demand is not met, prices can reach records high. This paper will talk about the supply and demand and how it has affected prices increase for corn products.

Market Equilibrating Process Paper

Today’s society coordinates its wants, needs, and desires in many ways and to do this it must study social mechanisms, political realities, and social customs. Economics is the social science that examines how individuals, institutions, and society make optimal choices under conditions of scarcity, (McConnell, Brue, & Flynn, 2009). Market Equilibrating Process Related to Corn Shortage

Scarcity is when the goods available are too few to satisfy the desires of individuals (Colander, 2004). Simultaneous changes in supply and demand affect equilibrium price and quantity in various ways, depending on the relative magnitudes of the changes in supply and demand, (Colander, 2004). A decrease in the supply of a product increases its equilibrium price and reduces its equilibrium quantity. In contrast, an increase in the demand for a product boosts its equilibrium price and its equilibrium quantity, (McConnell, Brue, &Flynn, 2009). This affects economies around the globe. Mexico has one of the most unstable economies. During the first week of April, the government in Mexico announced the price increase of corn tortillas. The price of...
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