...Marketing Equilibrium Process Tracey Wilson ECO/561 January 14, 2013 Paul Palley Marketing Equilibrium Process The market equilibrium process is the manufactures ability to maintain a balance between supply and demand. The manufactures has strategically taken into consideration during their planning process how to maximize profits while maintaining the units needed to meet the cost that the consumer will pay above an item at a specific moment in time. In layman term, the market equilibrium process clarifies what happens when the consumers and sellers make decisions in a proficient market (McConnell, Brue, & Flynn, 2009). Therefore, it is important to understand economics, which is the study of scarce resources as it relates to human wants and how this process relates to making choices. The purpose of this paper is to describe the market equilibrium process as it relates to five basic economic concepts. The primary problem of economics entails that individuals must make choices among completing alternatives. Scarcity can never be eliminated, one must choose. “Scarce economic resources mean limited goods and services. Scarcity restricts options and demands choices” (McConnell, Brue, & Flynn, 2009). In life one must make choices, such as an individual’s decision to study an extra hour rather than going to dinner with a friend; therefore, the marginal benefit of studying exceeds its marginal cost. This is also a prime example of opportunity cost. Opportunity...
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...Marketing Equilibrating Process ECO/561 Laurie Gazzale February 22, 2010 Marketing Equilibrating Process The marketing equilibrium process in Direct Selling Association businesses is analyzed from two perspectives. This paper will review the perspective of the manufacturing company and the individual selling the product. Changes in supply, demand, and equilibrium are addressed. Direct selling home businesses have become more popular as the job market becomes less dependable. With the rise of unemployment and “stay-at-home moms” wanting to contribute to the household income, more families are choosing established at home businesses. One business in particular that has seen record increases is Tastefully Simple. Tastefully Simple is a member of the Direct Selling Association of which policies and procedures are put in place to protect the end user, the consumer. Since the incorporation in 1995, the company has increased from a small, two person operation in Minnesota to a nationwide at-home business consisting of more than 28,000 active consultants in the United States and Puerto Rico (2010, February). Since 1995 the price of the product has increased slightly because of the price in manufacturing costs. For instance, in 1995 the Bountiful Beer Bread had a retail price of $4.99 and just last year increased to $5.49. The increased retail price has not slowed down sales for a large part of the selling audience; however...
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...Market Equilibrating Process ECO/561 - Economics , Instructor This paper will explore the market equilibrating process and relate this process to a personal experience that has occurred in my life. According to the assigned reading, the equilibrium price for a product is the price at which the demand and supply curves intersect. In competitive markets, prices that are higher than the equilibrium price will result in a surplus and the market price will fall. When the market price is lower than the equilibrium price, a shortage will exist and the market price will rise. The equilibrium price is stable under existing demand and supply conditions. At equilibrium, no tendency for price to change is expected. Changes in supply or demand will cause predictable changes in both the equilibrium price and quantity. (McConnell, Brue, & Flynn,2009). To find market equilibrium, the two curves are combined on one graph. The place of meeting point of supply and demand indicates the equilibrium point. Unless interfered with, the market will remain at this quantity and price. At the point of connection, sellers and buyers see eye to eye on the quantity and price. Relating this process to my personal life experience, I look at the housing marketing. I worked for five years as a licensed Real Estate Agent. When I started in the business, it was booming. It was definitely a seller’s market. The demand was high for mega houses, condominiums and investment properties...
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...Market Equilibration Process Hair care is very lucrative business. Millions of men and women use hair salons as their choice of preference. I personally choose to visit the salon on a weekly basis. Although I choose a weekly visit to the hair salon, most individuals don’t. Hair stylists have chosen a very volatile market because of seasonal changes, state of the economy and competitor pricing. Because there are many individuals like me who care to have services rendered at the hair salon, my hair stylist has a plan in place to obtain market equilibrium. For example, my hair stylist offers discounts to me and other customers during slow season to maintain market equilibrium. One example would be if he or she spends 100 dollars or more on a service, one would have the opportunity to save five dollars on his or her service, thus allowing continue future endeavors with the stylist. The drawback to this discount program occurs when clients are unable to come; the stylist is unable to maintain market equilibrium. To eliminate this my hair stylist has implemented more timeframes as to when these discounts can be redeemed such as Mother’s Day, Christmas, and New Year’s Day. This creates a market for equilibrium, supply, and demand for the owner and her business. This greatly benefits clients such as me; it allows me to disburse money while knowing that I will receive a discount on my hairstyle. I have also referred others to my stylist due to her customer discount program as well...
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...ASSESSMENT # 1: Economics and Ethical Issues by George Ugrekhelidze Strayer University Business Enterprise: BUS508 Professor: George H. Barbosa, PH.D 10/27/2009 ASSESSMENT #1.1 Introduction The paper responds to the questions posed in section titled “Mrs. Acres Homemade Pies” at the end of Chapter 1. Shelly Acres, a founder of the company, faces the dilemma in producing homemade pies. Mrs. Acres Homemade Pies struggles to keep up with demand. Question 1: Discuss What Will Happen to Supply, Demand and Price in the Short Term. Supply is a various amount of product that producers are willing or are able to produce for selling at different prices at a specific time. In our case supply is an amount of pies Shelly Acres’ company, Mrs. Acres Homemade Pies produces. In the first month of the business she sold 2000 pies. Following month amount of sold pies rose to 8000. Demand is a various amount of product that buyers are willing or are able to purchase at different prices at a specific time. In our case, demand for Mrs. Acres’ homemade pies is rising. Good quality product and a reasonable price of pies caused rising demand. It continues accelerating beyond what Shelly can supply. The most of the time when company produces a high quality product in reasonable price, demand for this product will increase. This is happening to Shelly Acres’ business. In short term, demand will keep rising. Also, the necessity of...
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...Marketing Equilibration Process Paper ECO/561 Marketing Equilibration Process Paper The market equilibrating process is the method or methods in which manufacturers tend on maintaining a balance between supply and demand reaching equilibrium. This is help by using competition between and among buyers and sellers sets off equilibrium process. For example firms with excess inventories cut prices to try to undersell their competition. As the price falls, quantity demanded rises, and quantity supplied falls. Buyers competing with one another for goods in short supply bid up price to try to capture some of the good as price goes up, demand falls and supply rises (McConnell, 2009). I think looking at an electronic device is a perfect example. Take the IPhone, the new versions are always in demand but the old versions are easily replaced. When AT&T had a monopoly on the IPhone other companies tried to put out products like the droid or update the blackberry so that it was able to compete with AT&T. Now that AT&T does not have the sole contract for this device there is still a demand but it is across the board and not solely with one company. The law of demand also affects the market equilibrating process. The law of demand in theory says that there is a negative relation between price and quantity demanded. For example if price goes up, quantity demanded goes down; if price goes down, quantity demanded goes up (McConnell, 2009). This can be seen when an IPhone was brand...
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...consumer information and use it to gain exclusive access to finer consumer segments, even when the costs of customized marketing are exceedingly high. When such is the case, the opportunity arises for an intermediary to coarsen market access in order to protect consumer surplus and to bar firms from exercising price discrimination. This intermediary could be a mass retailer, a mass media or a diverse community. Formally, the paper analyzes the situation of an intermediary who owns a finer market access system, i.e., the capability to separately access two types of consumers who previously remained undistinguishable. The system could be made available to one firm in exclusivity, or to several firms (two instances of “exposure”), or to no firm at all (“privacy”). The best-bidding agent (from among firms, marginal-type consumers, and mainstream-type consumers) is buying the right to command the equilibrium access allocation. The solution involves either privacy (commanded by mainstream consumers) or exclusive exposure (commanded by a firm), depending intuitively on factors such as consumer involvement, homogeneity and adaptability, as well as the size of returns to scale in marketing and the extent of competition. Keywords: Segmentation, price discrimination, privacy, exposure, intermediary, involvement, homogeneity, adaptability, returns to scale, competition, marketing. JEL classification numbers: D0, D4,...
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...companies face. The subject of this paper will also give examples to these questions as they relate to the simulation to complete the knowledge of basic concepts in applied economics. Basic Concepts The supply and demand concept located in the simulation is key dynamics and basic concepts in applied economics. The main objective of this simulation is for Good Life Management to keep the equilibrium point in the two-bedroom rental apartment market in the city of Atlantis. Customer likes and preference, cost, and the level of the residents have the effect on the demand. The numbers of apartments, the quantity of apartments available and the quantity of apartments rented have the effect on the supply. Additionally, a variety of concerns should be taken into consideration such as the shift in supply and demand, and the process the shift in supply and demand has on the business environment. Furthermore, Management should think about the significance of the marginal analysis with decision-making, appropriate output levels, and the costs associated to the business and marketing efforts. For management to prevail over the economic barriers, the business needs to examine supply and availability of company merchandise and the demands of customers in a specified market sector. How do changes in the business environment cause changes in supply and demand?...
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...Market Equilibrium Process Paper ECO/561 January 15, 2013 Paul Andoh Market Equilibrium Process Market equilibrium process is defined as the matching process of supply and demand of the consumers. The law of demand is simply the pricing of items as it relates to the demand of item. McConnell, Brue, & Flynn (2009), “states that consumers preferences along with marketing of goods; expectation of consumers; level of income from consumers purchasing products; and cost of goods determines how the level of demand will be affected” (Chapter 3). Consumers are drawn to items for many reasons (i.e., looks, style, and latest design) however; the items may or may not be readily available. For instance, during the holidays many consumers searched for the latest and greatest game devices and other electronic devices. But what we have discovered is that during that specific time of year, the demand for such items are extremely high and he supply of demand seems to fall short. When an individual is seeking a specific item that cannot be found in stores, the internet is the next big source to finding what cannot be kept on shelves in stores. In most cases the prices online may be higher because of shipping but consumers find that it is a price they are willing to pay for peace of mind and to have the product of demand at the time. When a consumers desire to purchase a product that is not readily...
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...(Nestle, 2014). Lean Cuisine is owned by Nestle and offers variety of frozen foods and is a leading choice for low calorie food. Demographic market segmentation is a strategy where the company divides the larger market into groups based on several defined traits (Kokemuller, 2014). These traits include age, race, gender, marital status, occupation, education and income are included (Kokemuller, 2014). In analyzing these variables you can look at behavioral traits to determine buying patterns. In determining the market structure for food industry, you should first have a market strategy. The purpose of a marketing strategy is to help a company make as much profit as they can each year. The marketing strategy can always change and will never stay the same. In developing a market strategy a specific demographic will need to be targeted. Consumer behavior is a process that can help determine a purchase decision. Once marketers have enough data about our shopping habits and preferences, they...
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...2. Risks of auctions 4 3. Buyers decision-making process in auctions 4 4. Type of auction 5 5.3. English auction 5 5. Economic theories 6 6.4. Rational behavior 6 6.5. Effects of irrational behavior 7 6. Conclusion 7 7. References 8 1. Introduction While the Internet has become an essential resource in the global economy, it has not only changed the way consumers think, behave, and make decisions, it has also changed businesses. Since the opportunity of reaching out to a mass-market was created as a result of the Internet and its easy accessibility, businesses are scrambling to take advantage of changes in their markets. An example of one of those businesses is an auction. As a result of the development of sophisticated software that enables businesses to buy and sell on the Internet under secure conditions, the e-business model of auctions, called online auction, has emerged. Online auctions adapt the traditional auctions to the instantaneous advantage of the Internet to reach new markets that were previously cost-prohibitive by reducing transaction costs. Advantages such as the size and scope of the audience are enabling Internet auctions to play a major role in the emerging global economy (Sashi & O’Leary, 2002). The aim of this paper is to look deeply at how the buyers behavior, and their decision making process, has changed in online auctions as opposed to traditional auctions...
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...since we had way more inventory than customers wanting to buy our glasses or more supply than demand. Surplus is the extent to which generation of goods, services and resources (such as capital) exceeds their consumption. After doing a bit more research, we decided to use different marketing tools and strategies to see if that would help improve sales and had no luck. We then started looking at our competitors and realized that not only were they having more success that us, but their prices were much lower and it was then when we realized that lowering the prices could be a solution. My partner and I decided to play with the numbers a little. During holidays, we offered 75% discounts so customers could buy a pair for $10. The first trial was close to Christmas and within two weeks all shades were sold so we then realized that if we were to continue these holiday sales, we would experience shortage or have less supply than what is demanded. An economic shortage is a disparity between the amount demanded for a product or service and the amount supplied in a market. Specifically, a shortage occurs when there is excess demand; therefore, it is the opposite of a surplus. In order to reach our equilibrium point or the point where our supply met the demands for our particular shades, we went back to our $40 price and then brought the price down by $4 every month. By the 4th month, prices were dropped to $24 per...
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...Supply in Tourism The correlation between price and how much of goods or service is supplied to the market is known as the supply relationship. Price, therefore, is a reflection of supply: The Supply Relationship The four basic laws of supply and demand: 1. If demand increases and supply remains unchanged, a shortage will result, leading to a higher equilibrium price. 2. If demand decreases and supply remains unchanged, a surplus will result, thus leads to a lower equilibrium price. 3. If demand remains unchanged and supply increases, a surplus will result, leading to a lower equilibrium price. 4. If demand remains unchanged and supply decreases, a shortage will result, leading to a higher equilibrium price. Equilibrium Price: The market price at which the supply of an item equals the quantity demanded. Law of Supply and Demand In free markets, surpluses and/or shortages tend to be temporary and obey the law of supply and demand, since actions of buyers and sellers tend to match prices back toward their equilibrium levels. Characteristics of Tourism Demand: Elasticity: Supply of some tourism facilities (eg accommodation) is ‘inelastic’…. i.e. limited or restricted. When supply is limited competing forces may bid the price up. In response to higher offers suppliers may be willing to increase production (extend the hotel, release additional rooms). Price Elasticity: If the percentage change in demand is greater than the percentage change...
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...substitutes? a. Popcorn and Soda b. Automobiles and bicycles c. Boats and fishing tackle d. Wine and cheese B 3. If a price in a competitive market is “too high to clear the market,” what does this usually mean? Assume upward-sloping supply curves. a. No producer can cover the costs of production at that price. b. Quantity supplied exceeds quantity demanded at that price. c. Producers are leaving the industry. d. Consumers are willing to buy all the units produced at that price. B 4. Which of the following statements is incorrect? Assume upward-sloping supply curves. a. If the supply curve shifts left and the demand remain constant, equilibrium price will rise. b. If the demand curve shifts left and the supply increase, equilibrium price will rise. c. If the supply curve shifts right and the demand curve shifts left, equilibrium price will fall. d. If the demand curve shifts right and the supply curve shifts left, price will rise. Section Two: Short Answer (250 words or less) 1. Define elasticity of demand. Provide an example. ANS: How much the quantity demand changes when the price changes. EX: If subway sandwiches were selling in large amounts when prices were $5, now the prices changes to $6.50 and up the demand for a $5 sandwich goes down because people were use to buying them for so long at a cheaper price. 2. Define the law of diminishing marginal utility. Provide an example. ANS: For each additional unit of a product an individual consumes, the...
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...MARKETING EQUALIBRATING PROCESS Charles E. Caldwell ECO/561 Week One 20 July 2010 Lisa R. Browning University of Phoenix When one enjoys gambling, many benefits come to a casino owner. Casino owners become very innovative in their ideas to transition customers into clients. When I travel to gamble it normally takes 3 hours to get to the nearest casino arena. Because of the distance my plans are always to stay over and enjoy the gambling scenario. Because there are many like me who care to stay and enjoy their stay and hopefully win while there, casino owners have enhanced their casinos to ensure that business is consistently received. For example, Casinos have created gambling plans for their customers. One example would be if you play certain games you have the opportunity to get receive a free room or buffet dinners, this allows the customers to feel free to continue and enjoy their time. The downside to this incentive is when gamblers do not come, in this case rooms are not being occupied, food is not being eaten and money is not being made. To eliminate this casino owners have implemented timeframes as to when these rewards can be redeemed. This creates a market for equilibrium, supply and demand for the owner and their business. This benefits consumer such as myself, it allows me to spend more money while knowing that my meals and stay will be compensated based on how much or often I play at the casinos. I have begun to schedule my trips based on...
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