Market Equilibrium Process Paper

Market Equilibrium Process

Today’s economy has affected the markets, as demand, supply, price and quantity are involved. Working the retail industry demand, supply, price and quantity are the basis of our business. The organization that I am currently working for is a closeout overstock business. We receive products from liquidations, overstock, off season or discontinued merchandise and shelf pulls.

Law of Demand

According to Mc Connell, Brue, and Flynn (2009), Law of Demand occur when other things equal, as price falls, the quantity demanded rises, and as the price rises, the quantity demanded falls. As a closeout store we receive at times limited products and price them comparatively. Last month we received a small shipment of 7 inch android tablets. Comparative to other retailers we priced our tablets at least 40% lower. At the low price we received a large demand for them, we sold out of the product and there are customers a month later still acquiring about the tablet. Last week we received another version of the tablet at a higher cost, and we did not receive as much demand for the product as the lower priced tablet. After the demand lowered for the more costly tablet, the corporate office decided to lower the price for the upcoming advertisement.

As demand can change depending on determinates, the demand was affected by the price of the tablet. A change in the price of a related good may either increase or decrease the demand for a product, depending on whether the related good is a substitute or a complement (Mc Connell, Brue, & Flynn, , 2009).

Law of Supply

As price rises, the quantity supplied rises; as price falls, the quantity supplied falls this relationship is referred to Law of Supply (Mc Connell, Brue, & Flynn, , 2009). The price of the tablet increased and the supply also increased as when the price decreased the supply also decreased. As stated earlier the corporate office reviewed the demand for the lower priced tablet versus the...