Summary: Market Equilibration
Market Equilibration Process Paper
ECO/561
FEBRUARY 27, 2012
JERRY KING
Market Equilibration Process Paper Economics by McConell, Brue, and Flynn described the economic concepts of supply, demand, and market equilibrium. I will help relate the opportunities to the real world by providing examples while discussing the market equilibrating process. Within daily life, one may experience market equilibrating when they get laid off or even get a new career. When one gets a new job one might, buy a car, more clothes, go on vacations, or even purchase a home. If one is laid off, he/she will expect or demand less because there is less money. Demand is a schedule or curve that reveals the various amounts of a product that consumers …show more content…
There were housing expansions and new development throughout the state of Alabama, consumers were able to take out easy loans, and several individuals were flipping properties, expecting the housing market to continue to rise. Suddenly the market changed rather quickly, and home values decreased. Investments in the real estate market quickly stopped. The housing supply now surpassed the demand and prices decreased. This created a flood of short sales and foreclosures for many homeowners. Many families were out of homes and became renters. Modification within the marginal pricing of homes was most likely more important to the market equilibrating process than the decrease in average price solitarily. Housing and apartment prices are patterned after the modifications in housing supply and demand. The demand angle includes aspects that are expected to change in price, demographics; household income expected return on a house as well as other factors that are demand …show more content…
As price rises, the quantity supplied rises; as price falls, the quantity supplied falls. This relationship is called the law of supply. A supply schedule tells us that, other things equal, firms will produce and offer for sale more of their product at a high price than at a low price. (McConnell, Flynn 2009). The supply side within real estate consists of aspects such as location, the houses age and state of housing or institutional factors that facilitates or hinder households’ access to the housing market, such as financial innovation on the mortgage and housing loan market. With the current economic hardships the housing market predictions are a few years until housing
ECO/561
FEBRUARY 27, 2012
JERRY KING
Market Equilibration Process Paper Economics by McConell, Brue, and Flynn described the economic concepts of supply, demand, and market equilibrium. I will help relate the opportunities to the real world by providing examples while discussing the market equilibrating process. Within daily life, one may experience market equilibrating when they get laid off or even get a new career. When one gets a new job one might, buy a car, more clothes, go on vacations, or even purchase a home. If one is laid off, he/she will expect or demand less because there is less money. Demand is a schedule or curve that reveals the various amounts of a product that consumers …show more content…
There were housing expansions and new development throughout the state of Alabama, consumers were able to take out easy loans, and several individuals were flipping properties, expecting the housing market to continue to rise. Suddenly the market changed rather quickly, and home values decreased. Investments in the real estate market quickly stopped. The housing supply now surpassed the demand and prices decreased. This created a flood of short sales and foreclosures for many homeowners. Many families were out of homes and became renters. Modification within the marginal pricing of homes was most likely more important to the market equilibrating process than the decrease in average price solitarily. Housing and apartment prices are patterned after the modifications in housing supply and demand. The demand angle includes aspects that are expected to change in price, demographics; household income expected return on a house as well as other factors that are demand …show more content…
As price rises, the quantity supplied rises; as price falls, the quantity supplied falls. This relationship is called the law of supply. A supply schedule tells us that, other things equal, firms will produce and offer for sale more of their product at a high price than at a low price. (McConnell, Flynn 2009). The supply side within real estate consists of aspects such as location, the houses age and state of housing or institutional factors that facilitates or hinder households’ access to the housing market, such as financial innovation on the mortgage and housing loan market. With the current economic hardships the housing market predictions are a few years until housing