Market Equilibrating Process

Running head: MARKET EQUILIBRATING PROCESS

Market Equilibrating Process Paper

Charmaine Miles

University of Phoenix-MBA

ECO/561

Gordon Myer

November 19, 2009

Market Equilibrating Process

The market equilibrium is described as the point at which the quantities demanded and supplied are equal (McConnell, 2009). The concept is derived from combining equilibrium price and equilibrium quantity to yield the equilibrium of a specific market. Changes in the determinants of demand, such as how much the product sales and the price of the product can affect the equilibrium of a market. Changes in determinates of supply can also affect a specific market. Supply determinates, such as taxes and subsidies, production techniques, and prices of other goods can cause a specific market to decrease or increase in supply, resulting in changes of equilibrium quantity. The above listed facts about the market equilibrating process can be exhibited in an individual’s past experiences.

Before making a trip to the local grocery store, looking through the sales papers of the stores competitors can assist in bargain shopping. While one sales paper may have a certain item listed for one price another store may list the same item for another price. There could be several reasons for the inconsistency in the sales papers. The item could have been out of season, the supply could have been in surplus, or the demand for the item decreased. These are a few consequences that could result in the item going on sales.

Strawberries are an item that comes to mind when reflecting on marketing equilibrium process. Strawberries cost approximately $2.99 a pound in the city of Houston grocery stores when not on sale. Strawberries are a seasonal fruit and can be affected by determinates in the market, such as supply and demand. Depending of the time an individual wishes to purchase strawberries they may be as pricy as $2.99 or as low as $1.69. A...