Market Equilibrium

market Equilibrium University of Phoenix ECO/561 Economics November 18, 2010 Market Equilibrium Growing up in the retail and business service industrys supply and take aim, set and market equilibrium is very important component on how they survive. Businesses in general are dependent on any of these to determine the way they price, order, stock and continue to carry inventory. Market equilibrium is defined as, A situation where the supply of an stop is exactly equal to its demand. Since neither at that place is surplus nor paucity in the market, there is no innate tendency for the price of the item to change. (Business dictionary, 2010). This is common on most items and usually happens eventually. planning and demand is a fundamental factor in formative the character of the marketplace, for it is understood as the principal determinant in establishing the cost of goods and services. The availability, or supply, of goods or services is a find out consideration in determining the price at which those goods or services can be obtained. The other half is demand. A company may be able to produce extensive quantities of a product at low cost, but if there is little or no demand for that product in the marketplace, the company will be forced to sell units at a very low price. USLegal, 2010).

Price, The sum or substance of money at which a thing is economic valued, or the value which a seller sets on his goods in market; that for which something is bought or sold, or offered for sale; equivalent in money or other means of exchange; current value or rate paid or demanded in market or in barter; cost. (de.fine.com, 2010). Now that we understand each of the expensive tools, we can discuss how they interact and help businesses make aware decisions about product. Competition is not the only factor that influences the determine of product; actually the consumer has a much larger role. Consumer demand will influence the pricing greatly due to the... If you require to get a full essay, order it on our website: Orderessay

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