Market Equilibrating Process Paper

Market Equilibrating Process Paper

As a young adult and a new mother I have had a little experience with market equilibrium both before and after I became a mom. Although I did not realize that was what I was experiencing at the time, it now makes perfect sense. Before I became a mom, the main things I would spend money on were video games and books. Whenever a new video game would hit the market it would always start out at $40.00 and slowly drop in price. One game I can seriously remember this happening with was the game on the Playstation console called “God of War”. When I purchased it for my father originally it was round $60.00 for a brand new copy and you had to pre-order it or join the masses of unlucky gamers who had to wait for a copy to come in on back order or get traded after someone finished beating it.

In November 2006, a product was released in the United States caused several broken televisions across the nation. This product was the game console known as the Nintendo Wii. The splash created by the Wii console’s arrival on the market will be remembered mostly for the fact that for several months after the release they were almost impossible to purchase. I became a proud owner of the console in the summer of 2007. After calling three Wal-Marts in three different cities, I was finally able to find one within an hour’s drive of where I lived at the time. At the time they were priced at $250.00.

The text mentions that, “the market equilibrium price will be the price at which the total quantity supplied of the product equals the total quantity demanded” (Brue, Flynn, & McConnell, 2009, p. 188). When the Wii first came out it was $250.00 and you could not really find them anywhere. Now almost four years later they are in the electronics department of most stores. Since so many Wii consoles are now available, the price on the system has actually dropped by $100.00. According to the definition from the text the prices now equal out. While my...