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Demand, Supply, and Equilibrium Point

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Equilibration is the process of moving between two equilibrium points as a result of some change in supply or demand. Understanding how market equilibrium is sought following such a change is essential for business managers. It is important to understand how economic principles, and specifically supply, demand, and their determents are a part of your everyday business decisions.

using a real world experience in a free market (not government regulated) to describe a change that occurred in supply or demand as a result of world events that led to the need for a move between two equilibrium states. Explain the process of how that movement occurred using behaviors of consumers and suppliers. Graph the movement between the two points as well.
Address the following bullets
Include academic research to support your ideas
Consider the Law of demand and the determinants of demand
Consider the Law of supply and the determinants of supply
Describe efficient markets theory
Explain Surplus and shortage

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Solution Summary

This report includes a discussion of the laws of demand and supply, including the various determinants of demand and supply. emphasis is given on important points such as:1) there is a direct relation between price and quantity supplied, 2) there is an inverse relation between pr1ce and quantity demanded, 3) equilibrium point is that point where demand and supply are equal, and 4) movement in the demand and supply curves would result to changes in equilibrium points, depending on the direction of the movements. Efficient markets theory, a related theory was also pointed out.

Solution provided by:
Elisa Valdez, PhD
Education
  • Bachelor of Science in Business Administration, University of the Philippines
  • Master in Business Administration, Saint Mary's University
  • Doctor of Philosophy in Education, University of the Philippines
  • Doctor in Business Adminstration (IP), Polytechnic University of the Philippines
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