Essays on Market Equilibrium

How Does Demand and Supply Affect All Businesses?

Economists use the model of supply and demand to analyze competitive market. Combination of the two sides of the market with each other creates the equilibrium price and the equilibrium volume and market equilibrium. A competitive market is characterized by a large number of buyers and sellers, each of which either has little effect, or no effect on the market price (Boundless, n. d.). Qualitative characteristic of the market equilibrium is that the market is balanced in this situation, i.e. neither sellers nor buyers have incentive to imbalance. Conversely, if the market is not in equilibrium, there is a ...

Deficit or Surplus

Effects of Federal Budget Deficit or Surplus Q4. Explain why a federal budget surplus increases national savings, while a budget deficit decreases national savings. Reply: A government’s budget balance is the difference in government revenue and spending. When the federal expenditure is less than federal revenue, the federal budget is in surplus. National savings is the sum of private and public savings. In the case of the budget surplus, the government sector is a net contributor to national savings. This causes an increase in national savings. When federal budget is in deficit, the federal expenditure is more than ...

1) The supply is the amount of goods and services offered for sale on the market at a certain price. It depends on prices: the higher they are, the higher is the offer from the seller, since the latter is interested to get as much money from the sale of goods (services) that makes his economic interest. This is called the law of supply. Quantitative dependence suggestions from a change in the price of goods called "supply elasticity". It is measured as the ratio (in percent) growth of volume of supply to higher prices. 2) The term "demand" in ...

Two of the top companies in the low-calorie frozen, microwavable food industry

In modern life, people are becoming busier, thus, they spend very little time for traditional cooking. Due to growing demand for convenient food and thanks to the development of advanced technology, microwave becomes a useful and common tool in kitchen which helps people to save a lot of cooking time and effort as well as preserve the taste of food. The prevalent use of microwave in every household leads to the growing need for microwavable food. For this reason, many low-calorie frozen, microwavable food companies are found to provide high quality food with convenient way of cooking . At the ...

Changes in Market Equilibrium

The interaction of the forces of demand and supply determines the equilibrium price and quantity in a perfectly competitive market. A market is in equilibrium when no buyer or seller has any incentive to the change in the commodity that he or she buys or sells at the given price. The equilibrium price of a commodity is the price at which the quantity demand of a commodity equals the quantity supply and the market clears. The process by which the equilibrium is reached is shown by the intersection of the demand and supply curve of the commodity.

Summary of the Video

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Introduction

The electricity industry is facing numerous challenges today including environmental pollution, increased demand, and aging infrastructure. Environmental issues are the primary concern of the power generation industry and have necessitated the inclusion of renewable energy sources in the generation of electricity. Renewable portfolio standard has set forth new requirements in the industry obligating electricity generation companies to generate a certain percentage of generated electricity to come from renewable sources. However, rapid integration of new energy sources on the old transmission and distribution infrastructure will cause quality, security and reliability challenges on the electric power supply. The good thing is ...

Externalities take place when consumers/manufacturers activities have an unintentional or indirect impact on other consumers/manufacturers without affecting prices. According to Sankar, externalities may cause positive and negative effects (6). In other words, if the consumer or a group grants certain benefits to other economic agents, the externality is positive; if any activity is disadvantageous to other groups or individuals, then the externality is negative (7). According to Stiglitz (216), “Externalities arise whenever an individual or firm undertakes an action that has an effect on other individual or firm”. The externalities phenomenon tends to have a spillover effect in the ...

Qin, Amy. (20 April 2016). China’s Smaller Cities Struggle to Cultivate an Interest in Classical Music. The New York Times. Retrieved from http://www.nytimes.com/2016/04/21/arts/music/chinas-smaller-cities-struggle-to- cultivate-an-interest-in-classical-music.html This article is talking about the problems that the concert halls are having in China and the possible factors that could contribute to the growth of attendance. Especially the concert halls that are located in the smaller cities are having the difficulties with the attendance even though there is sufficient capacity and professional musicians that are supposed to attract large audiences. For the theaters attendance is vital, because it brings 50% of revenue (Qin, ...

PART A- Questions related to ‘The Mystery of the Invisible Hand’

Jevons Marshall is a fictitious pen name used by the true author(s) of the book. Who really wrote the book? What makes ‘Jevons Marshall’ a clever choice for the pen name in this case? Answer. The pseudonym Jevons Marshall is used by two renowned professors of economics who are William Breit and Kenneth G. Elzinga. The pen name is derived from the surnames of two famous economists named Alfred Marshall and William Jevons. The pen name made from the names of these two economists is deliberately used for writing mystery novels based on economics as where the former ( ...

In any market, the attainment of market equilibrium is of great essence. Market equilibrium is a situation where by the quantity demanded of goods equals the quantity supplied of goods. The point of interaction between the two curves, that is, the supply curve and the demand curve gives the equilibrium quantity and the equilibrium price . Market equilibrium as stated earlier is of essence in an economy in order to avoid the problem of inflation or deflation. The following paper will look at how market equilibrium is obtained when prices increase and quantity produced goes down. Price is the major ...

Introduction: In the words of Mankiw (2011), “Producer surplus is the amount a seller is paid minus the cost of the production. Producer surplus measures the benefit sellers receive from participating in a market” (p. 141). Contrary the consumer surplus which closely associates with the demand curve, producer surplus significantly depends upon the supply curve. Both consumer surplus and producer surplus serve as vital yardsticks of measuring the market efficiency which in turn defines the benefit of the buyers and sellers participating in the market. The following graph depicts the producer surplus.

Having understood the concept of producer surplus, an ...

What can the first and second theorems of welfare economics teach us about economic policy?

What is economic policy? Economic policy refers to those actions that a government undertakes in order to influence its economy. These Economic actions include regulation of interest rates through Federal Reserve, regulation of the government expenditure, implementing rights of private property, and laving tax rates. Welfare Economics is the method of systematically evaluating economic implications in the alternative resource allocated. Welfare economics deals with weather the sources allocated are efficient and who is going to lose or gain by how much in various allocations (Mark Blaug, 2007).

Fundamental theorems of Welfare Economics

Welfare economics has two fundamental theorems which are as follows: First ...

This paper analyzes the effects of certain events on the price and quantity of milk, considering that other factors are constant and equal. The analysis includes information about changes in quantity supplied and quantity demanded, and shifts in the demand curve and the supple curve. Analyzed events appear as subheadings throughout the paper. - A scientific study shows that consumption of milk is beneficial for healthy bones First of all, let us analyze the effect that this event would have on the quantity demanded of milk on the market. According the law of demand, quantity demanded of a ...

In this paperwork, I am going to respond to the following question- whether price floors are economically efficient. It is depicted that when a price floor is set, then a certain minimum price of a good or a service has to be paid. Setting up the price floor above the market price will result to no direct consequence, but setting it, the price floor, above the market price will entice the producers to produce more, thereby, resulting to the generation of excess supply. It is important to note that price floors are examples of strategies implemented by the government so as to ...

Introduction

During the early 1980s, the US auto industry was dominated by three domestic players, Ford, GM, and Chrysler. The import of cars into the US market was relatively less. The market penetration was relatively high in the car market. However, things started changing when the Japanese companies started exporting cars to the US market. In the first half of the 1980s, the market share of Japanese cars in the US market increased manifold. The market share from 17% in 1980 grew to 25% within a few years. Due to the increase in demand for Japanese cars, the demand for the ...

Introduction

With a continuous change in the external environment, the interaction between the businesses and the society is evolving. There is an increased importance of corporate social responsibility so as to enable business enterprises to contribute towards the society.

British Petroleum (BP): Nature, Structure and Products

BP previously named British Petroleum is a widely known British multinational oil and gas company. It holds one of the coveted positions among the six oil and gas "super majors". As per current data on market capitalization it is the fifth-largest energy company, judging by 2012 revenues, it is fifth-largest company globally and measuring by 2012 production it is the sixth largest oil ...

Introduction

During the early 1980s, the US auto industry was dominated by three domestic players, Ford, GM, and Chrysler. The import of cars into the US market was relatively less. The market penetration was relatively high in the car market. However, things started changing when the Japanese companies started exporting cars to the US market. In the first half of the 1980s, the market share of Japanese cars in the US market increased manifold. The market share from 17% in 1980 grew to 25% within a few years. Due to the increase in demand for Japanese cars, the demand for the ...

Chapter 10:

Question1. As government expenditure increases, the income increases. This increase in income leads to a rise in consumption expenditure. A 1 unit rise in income leads to a rise in consumption by the marginal propensity to consume. As consumption expenditure increases, this induces further increase in output in the economy. So income increases. The increase in government expenditure creates a multiplier effect. This multiplier depends on the marginal propensity to consume (MPC). Higher the MPC higher is the multiplier effect.

The money market is at equilibrium when the demand for money equals the supply of money. The demand for money has ...

ENVIRONMENTAL POLICY AND EXTERNALITIES

INTRODUCTION Externalities are one the most important topics in economics. Externalities are economics refers to the benefits and costs of production / or consumption that are not compensated. Externalities can be positive and negative and consequently having its own implications on the market equilibrium (Arnold, 2008).

POSITIVE EXTERNALITIES

In the case of positive externalities, benefits are offered to the third party who is neither a buyer nor a seller in a market economy. For example, fitting a bulb outside one’s house can be a simple example of a positive externality. This action will not only lighten one’s own house are but will also benefit ...

The supply and demand curves were determined after drawing a demand and supply schedule. The demand schedule is drawn by determining the quantity demanded at respective price of the iPhone phones. Thereafter, a graph is plotted based on the quantity demanded and the price to produce the demand curve. Consequently, the supply schedule is drawn by determining the quantity supplied at different prices of the iPhone phones. Thereafter, a graph is plotted based on the quantity supplied and the price. For instance, the quantity demanded of iPhone phones is 1 million at the price of 500 dollars and 600 dollars for ...

- Describe briefly the legal rights and privileges of common stockholders. Common shareholders ownership is considered to be residual. That implies that common shareholders can claim firm’s earning only after those of government, debt holders, and preferred shareholders have been met. They are considered to be a true owner of the company or the corporation. By virtue of being the true owners, they possess dividend rights, assets rights, voting rights, and pre-emptive rights. Going into further details , the common shareholders have the legal right to elect it board’s directors. The board in turn decides and elects ...

The FIFA World Cup is an international football tournament that takes place after every four years. This event will take place this year (2014) in Brazil. The FIFA World cup is world`s most famous sporting event. The event gets popularity due to broadcast by various television stations. Millions of people travel from their country to the host country to participate in the event. It is expected that the event would boost the economy of Brazil. This paper tries to examine the effects of the World Cup on the Brazilian Hotel businesses. Several businesses will increase their operations ...

Introduction

In a market, the price is determined when the forces of supply and demand interact. The market price that results from this interaction remains dependent on supply and demand. Goods or services only change hands once the seller and buyer come to terms on the price. Once they agree on a given price, that price is known as the “equilibrium price.” Changes in supply and demand result in changes of the market equilibrium price for a particular product. This paper presents the concept of demand, supply, equilibrium and four factors that may lead to a change in market equilibrium for beefsteak. Figure ...

In 2008 the world, and the U.S. in particular, were hit by what is referred to as the worst financial crisis since the Global Depression. Unusually severe crisis provoked unusually aggressive response from the Federal Reserve, and their actions still remain the topic of numerous debates – some argue that the response neglected long-term consequences focusing only on stabilizing the situation in the short perspective (Meltzer, 2012), while the others point out that had the government not intervened, 2010 GDP would have been 11,5% lower and number of people employed would been lower by 8,5 million (Blinder & Zandi, ...

QUESTIONS IN ECONOMICS

1.The AS curve does not describe the same kind of relationship between price and quantity as a microeconomic supply curve. Why? Because AS curve is derived from the macroeconomic equilibrium points of IS (Investment and Savings) and LM(Liquidity and Money Supply) curves. AS curve depends on the limits of the economy, if all the resources in the economy are used efficiently, then AS curve becomes parallel to the general price level dimension and perpendicular to the Real GDP axis. If all the resources are used, then it becomes parallel to the Real GDP axis. A supply curve ...

The Cause of Rental Price Increase in San Francisco Bay Area

Rental Price Increase in San Francisco Bay Area Introduction Moving to a new place normally means finding the most comfortable yet the most cost friendly apartment in the neighborhood as near as possible to the place of work. However, the first thing that comes into question in the moving-in process is the price of the rent that one should cut from his monthly paycheck. Cost of rent is a major concern in the San Francisco Bay area due to its staggering price. It became an apparent issue when apartment hunters are faced with over-the-top rental rates in the area. ...

My research topic is imperfect competition in labor market. I started to search about the studies about the effects of a firm’s monopoly or monopsony power on wages and hiring. I evaluate my paper with the major features of U.S. labor legislation which is about the evolution of the labor union movement, the effects of wage discrimination on the efficiency of the labor market and the overall effects of unions on economic performance. Imperfect competition means perfectly competitive markets which maximize economic surplus and reduce economic surplus to varying degrees. This market type is very common. There are various ...

Introduction

Unemployment occurs when individuals are deprived of jobs and seeking it. The rate of unemployment is measure of prevalence of unemployed people and is calculated through a percentage in which total unemployed individuals are divided by all employed individuals. During the times of recession, the economy generally experiences a high rate of unemployment. For details which have not anything to do using statistics or economics, nevertheless seem to be dogmatic, it has remained shared practice to categorize workers on sponsored by government’s provisional service and special work structures as jobless. According to standard definitions these workers may be considered as ...

Market is a physical or an electronic platform through which buyers and sellers come together and exchange of goods or services takes place. Markets help organize economic activity by ensuring efficient allocation of resources (Slembeck). Mankiw’s, in his economic principles, asserts the role of markets in organizing economic activity. The same can be explained with an example of price ceiling on a basic utility market. The scenario taken is the government in a developing country, in an attempt to help the poor, sets a price ceiling for bread to make it more affordable. Since the price ceiling is to benefit the poor, ...

Introduction

The bank of Queensland was instituted in 1874 as the first permanent building society in Queensland, Australia. Initially, it was being operated as Brisbane Permanent Benefit Building and Investment Society. This society was later incorporated in 1887 and then got amalgamated with the City and Suburban Building Society in 1921. Later on in 1931, it was again amalgamated with Queensland Deposit Bank. It received a license to operate as a trading bank in 1942. The bank computerized its operations in 1970 and then underwent a series of transformations that included changing its name to bank of Queensland. The bank was first listed ...