Market Equilibrating Process Paper Essay

Running head: MARKET EQUILIBRATING PROCESS paper Market Equilibrating Process Paper Sonia Reyna University of Phoenix Daniel Rowe ECO/561 June 1, 2010 Abstract Today’s society must study social mechanisms, political realities, and social customs to coordinate its wants, needs, and desires. Mexico has one of the most unstable economies. The government in Mexico announced the price increase of corn tortillas. The price of the product went up 14% last year. In supply demand, prices are affected by the demand of the resources and the ability to meet the demand.

If there is a high demand for resources and the demand is not met, prices can reach records high. This paper will talk about the supply and demand and how it has affected prices increase for corn products. Market Equilibrating Process Paper Today’s society coordinates its wants, needs, and desires in many ways and to do this it must study social mechanisms, political realities, and social customs. Economics is the social science that examines how individuals, institutions, and society make optimal choices under conditions of scarcity, (McConnell, Brue, & Flynn, 2009).

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Market Equilibrating Process Related to Corn Shortage Scarcity is when the goods available are too few to satisfy the desires of individuals (Colander, 2004). Simultaneous changes in supply and demand affect equilibrium price and quantity in various ways, depending on the relative magnitudes of the changes in supply and demand, (Colander, 2004). A decrease in the supply of a product increases its equilibrium price and reduces its equilibrium quantity. In contrast, an increase in the demand for a product boosts its equilibrium price and its equilibrium quantity, (McConnell, Brue, &Flynn, 2009).

This affects economies around the globe. Mexico has one of the most unstable economies. During the first week of April, the government in Mexico announced the price increase of corn tortillas. The price of the product had already gone up 14% last year. The increase outpaced inflation and minimum wage increases to its citizens by four percent (Gilot, 2007). Retailers in Mexico will be forced to keep prices at eight and a half pesos per kilo, which is about . 78 cents. Supply, Demand, and Price

As the demand of corn supply has increased, this caused the price of the resource to go up. In supply demand, prices will always be affected by the demand of the resources and the ability to meet the demand. If there is a high demand for resources and the demand is not met, prices can reach records high, (Colander, 2004). In the case of the corn tortillas, the departments in charge of increasing prices know the tortilla is an item mostly always consumed by all Mexicans. They know that even though the price increases, citizens will be forced to buy corn products. Conclusion

Today’s society must study social mechanisms, political realities, and social customs to coordinate its wants, needs, and desires. Mexico has one of the most unstable economies. During the first week of April, the government in Mexico announced the price increase of corn tortillas. This year’s increase came to surpass inflation and minimum wage increase. In supply demand, prices are affected by the demand of the resources and the ability to meet the demand. If there is a high demand for resources and the demand is not met, prices can reach records high. References

Colander, David C. (2004). Economics. 5E. The McGraw-Hill Companies, Inc. [University of phoenix Custom Edition e-text]. Retrieved May 27, 2010, from University of Phoenix, Student Resources Web site: https://ecampus. phoenix. edu/secure/resource/resource. asp. Gilot, L. (2010, April). El Paso Times, pp. 1. McConnell, Campell, Brue, Stanley, and Flynn, Sean. (2009). Economics. Principles, Problems, and Policies, 18 E. The McGraw-Hill Companies, Inc. [University of phoenix Custom Edition e-text]. Retrieved May 27, 2010, from University of Phoenix, Student Resources Web site:

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