We are a one-stop-shop for the online casinos information that will help you win big, we provide only the most honest, accurate and up-to-date information about the online casino industry.
Market Equilibrium - 20 |
|
 |
In most markets, the
competing desires of consumers and suppliers help to establish an equilibrium price
(Shown here as the point E.)
Firms monitor their level of stocks, and adjust prices. What firms want is to sell all of their stocks just before the next delivery, or production run. Consumers are always looking for the lowest price, at a given level of quality. |
Our butcher has discovered, by trial and error, that consumers will buy 100 kg of beef per week at a price of $8 per kilogram. If our butcher can supply beef at this price, and make a profit, he will remain in the market.
We can summarise this dynamic (''moving'') process : if Supply is greater than Demand, a surplus (or ''excess supply'') develops and prices tend to fall.
If Demand is greater than Supply, a shortage develops and prices tend to rise.