Market Equilibrium Market Equilibrating Process Essay

Open, View, and/or
Download this Document

Total Length: 752 words ( 3 double-spaced pages)

Total Sources: 3

Page 1 of 3

The price is so high, consumers begin to become reluctant to pay for the item. Retailers must lower prices to unload their excess inventory of Tickle Me Elmos, Cabbage Patch Kids, or Zhu pets.

A state of perfect equilibrium for a long period of time is rare. Perhaps one example of perfect equilibrium might be found at an elementary school that sells pizza to its students. The demand is relatively constant, given that the student population remains the same from week to week, and students have relatively few other options. Students whose parents give them money for pizza have no choice but to buy food on-site, since they have cannot eat otherwise; students who 'brown bag it' are unlikely to buy lunch, even if the pizza is substantially cheaper one day. Because lunchtime is finite, few students have the time to eat more than one or two slices, so they will not buy more if price is lowered. The vendor has discovered over time what price students are willing to pay so the pizza parlor can still make a profit and can guess what the demand will be, based upon the fixed number of students and the time of year or week. Although some students may occasionally buy other items and some students may elect to throw out their bagged lunch and purchase pizza that day, overall the balance between supply and demand is relatively stable.

Stuck Writing Your "Market Equilibrium Market Equilibrating Process" Essay?

View All Our Example Market Equilibrium Market Equilibrating Process Essay

Have A Custom Example Essay Written



This will change if, for example, tomatoes become substantially higher in price, the vendor must raise his prices, and students must decide if they are still willing to purchase pizza. If demand goes down as price goes up, the producer may have to make fewer pizzas. This could cause an upsurge in demand, as students begin to see the pizzas disappearing more quickly at lunch. However, if input costs and available substitutions remain relatively stable, when numbers of demanding consumers are unaltered, as is supply, price is likely to be stable under these relatively controlled market conditions......

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Market Equilibrium Market Equilibrating Process" (2010, March 02) Retrieved May 21, 2025, from
https://www.aceyourpaper.com/essays/market-equilibrium-market-equilibrating-13123

Latest MLA Format (8th edition)

Copy Reference
"Market Equilibrium Market Equilibrating Process" 02 March 2010. Web.21 May. 2025. <
https://www.aceyourpaper.com/essays/market-equilibrium-market-equilibrating-13123>

Latest Chicago Format (16th edition)

Copy Reference
"Market Equilibrium Market Equilibrating Process", 02 March 2010, Accessed.21 May. 2025,
https://www.aceyourpaper.com/essays/market-equilibrium-market-equilibrating-13123
   

Open, View, and/or
Download this Document
order custom essay example