Market Equililibrium

Topics: Supply and demand, Economic equilibrium, Equilibrium Pages: 2 (365 words) Published: March 17, 2013
Running head: Market Equilibration Process Paper

Market Equilibration Process Paper

Market Equilibration Process Paper
Previously I worked for a manufacturing company that makes laminated film. They use liquid adhesive and film to create a “tape”. The tape can be sliced to 1/16 increments or sold as a whole roll which is sixty inches. This particular industry is relatively independent of the current recession as the materials are used on Tylenol bottles, Kroger price stickers, and Ortho products just to name a few. Supply and Demand

All other things being equal, as price increases so does the quantity demanded. On the other end of the spectrum is demand. When price is lower consumers purchase more of a product and when price is high consumers purchase less of a product. These two laws are graphed in Appendix A. According to the text market equilibrium price at which quantities demanded equal quantities supplied. (McConnell, Brue, Flynn, 2009 This intersection is also depicted in a graph in Appendix A. Technological advances like the internet and better machinery have improved market efficiency in this industry. (McConnell, Brue, Flynn, 2009) The machines are able to keep the material within .01% quality defects. The logistics technology ensures same day shipping for most products. The biggest issue in surplus and shortage is the cost of fuel. Some of the film is petroleum based and all of the products are shipped to the company. When the cost of oil rises drastically as it did a few years ago, the shortage of film caused the company to look at other resources to make the film. By creating a new relationship with a new supplier, the company ended up with a surplus from having multiple resources to purchase raw material from. From the stand point of an owner, this particular industry is a solid reliable industry that is capable of producing decent profits regardless of the state of the economy. People will always need medicine and...
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