Market Equilibration Process Paper

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Market Equilibration Process Paper
Victoria Johnson
ECO/561
April 12, 2010
Mike Blackmon

Market Equilibration Process Paper
No matter what we do throughout our lives we always want those factors that make our lives to always balance out. The same concept can be applied in the business world. Market equilibrium is the state in which market supply and demand balance each other, which makes the prices on products and services stable.(site) In order to understand market equilibrium, it is important to have a clear understanding of supply and demand. A supply is a schedule showing the amounts of a good or service that sellers will offer at various prices during some period.(site) An example of a supply can be a pair of Ralph Lauren boots or a Playstation 3. A demand is a schedule showing the amounts of a good or service that buyers wish to purchase at various prices during a period of time. (site) One example of a demand is the amount of people who want to buy those products during the Black Friday. Consumer desires, consumer income, the amount of substituted goods that could be produced, and the advances in technology are all variables that can demand which way the market equilibrium shifts. This paper will express how market equilibrium is involved in the automotive industry and how the demands for those automobiles shift. A real life example that pertains to the concepts of the market equilibrium of supply and demand is in the automotive industry. This process normally takes place at the beginning and the end of the calendar year. Ever since I have been working at JT’s Automotive Group there has always been a huge demand for a KIA. Since gas prices have increase the demand has been so high. The reason for this is because all the cars within the KIA brand are fuel efficient automobiles. Last month JT’s Automotive Group ran a huge sale which almost cut the prices on these automobiles almost in half. Consumers from all over the southeast and from the...
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