Market Equilibrium Process

Topics: Supply and demand, Economic equilibrium, Partial equilibrium Pages: 3 (697 words) Published: December 26, 2011
Market Equilibration Process Paper

ECO/561 Economics


Market Equilibration Process Paper

Concepts of the market equilibration process relate to real-world occurrences in a free market. Body 1:
Body 2:
Body 3:
Market Equilibration Process Paper
- Relate the concepts of the market equilibrating process in the Weeks One and Two readings and learning activities to a prior real-world experience occurring in a free market. The experience does not necessarily have to be work related.

- Explain the market equilibrating process in relation to your experience. Include academic research to support your ideas.

- Consider the following components in your explanation:

• Law of demand and the determinants of demand
• Law of supply and the determinants of supply
• Efficient markets theory
• Surplus and shortage

- Use University of Phoenix Material: Appendix A to create graphs illustrating the equilibrating process in price relation to the shift in supply and demand.

- Deliver the content as a 350- to 500-word paper, 7- to 10-slide Microsoft® PowerPoint® presentation, 2- to 3-minute video, or 1-page comic strip illustration.

Market equilibrium refers to the selling price “where the intentions of buyers and sellers match”. This means that the quantity sellers are willing to sell at a particular price matches the quantity buyers are willing to purchase at that same price, or, in other words, where the quantity demanded equals the quantity supplied. A surplus results when the price is too high (quantity supplied is more than consumers are willing to buy) and a shortage occurs when the price is too low (quantity demanded is more than quantity supplied). The equilibrium price changes when there is a shift in either supply or demand. The market is made up of two...

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