Market_Equilibrating_Process_Paper

Market Equilibrating Process Paper Faith Johnson University of Phoenix ECO 561 June 21, 2010 Market Equilibrating Process Paper “The market equilibrating process is where quantity demanded equals quantity supplied; the market is considered balanced.” (McConnell, Brue, & Flynn, 2009) In other words, buyers and sellers agree on both price and quantity. “Competition between buyers and sellers drives the market to the state of equilibrium.” (McConnell, Brue, & Flynn, 2009) In my case, I have two market equilibrium processes. First Equilibrium Process A few years ago, I signed up for a timeshare where I could get a vacation for less money. I could enjoy the benefits and having a home away from home from having a WorldMark Timeshare. I could go anywhere like Las Vegas, Hawaii, and other places and stay a week for under $100, instead of spending over $500 a week. As a member, I receive an annual allotment of vacation points to use toward each vacation I take a year. I would then receive the same number of points every year, and some points do roll over to the next year. Each accommodation has a vacation value that is determined by the type of the room and timing of the vacation stay. I would use more vacation points for places like Hawaii because it is very popular. Most of time, my Timeshare does offer gift cards to places like movies, Wal-Mart, JcPenney and even tickets to attractions such as Disneyland or Paramount Great America theme parks. Second Equilibrium Process In my personal life I experienced market equilibrating when I got a new job, and let the other job go. When I got the new job, I suddenly experience a personal demand for more goods. A person might go out and buy a new car, new clothing, or go on vacation. If you let go of a job, though, a person will hopefully demand fewer goods, because of having less money. A person will cut back on extras until their personal finances are in equilibrium, meaning a person will not be spending more than they earn. If a person don't cut back enough, though, then they will go into deficit, meaning into disequilibrium with credit card debt or other forms of loans. It is with the information that is provided above that market equilibrium, supply and demand play a role in both of my experiences. References McConnell, C. R., Brue, S.L., & Flynn, S.M., (2009). Economics: Principles, Problems, Policies. New York, NY: McGraw Hill Irwin.