equilibrium

Examples of equilibrium in the following topics:

• Impacts of Supply and Demand on Businesses

  • The point at which the two curves intersect is the equilibrium price.
  • At this point, buyers' demand for apples and sellers' supply of apples is in equilibrium.
  • If, on the other hand, a farmer tries to charge less than the equilibrium price of $0.60 a pound, he will sell more apples but his profit per pound will be less than at the equilibrium price.
  • The demand curve would change, resulting in an increase in equilibrium price.
  • The equilibrium price for a certain type of labor is the wage rate.

• Impacts of Supply and Demand on Pricing

  • Suppose the equilibrium price of burgers is $10, and 200 widgets are eaten every day in a particular town.
  • If demand increases and supply remains unchanged, then it leads to higher equilibrium price and higher quantity.
  • If demand decreases and supply remains unchanged, then it leads to lower equilibrium price and lower quantity.
  • If supply increases and demand remains unchanged, then it leads to lower equilibrium price and higher quantity.
  • If supply decreases and demand remains unchanged, then it leads to higher equilibrium price and lower quantity.

• A Brief Definition of Corporate Social Responsibility

  • ., to maintain equilibrium between the economy and the ecosystem.
  • Examine how social responsibility helps to sustain the equilibrium between economic development and the welfare of society and the environment

• Entrepreneurship and the Economy

  • Entrepreneurship is difficult to analyze using the traditional tools of economics e.g. calculus and general equilibrium models.
  • Equilibrium models are central to mainstream economics, and exclude entrepreneurship.
  • Joseph Schumpeter and Israel Kirzner argued that entrepreneurs do not tolerate equilibrium.

• Competition-Based Pricing

  • Smith and other classical economists before Cournot were referring to price and non-price rivalry among producers to sell their goods on best terms by the bidding of buyers, and not necessarily to a large number of sellers or to a market in final equilibrium.

• The Business Cycle

  • The first systematic exposition of periodic economic crises, in opposition to the existing theory of economic equilibrium, was the 1819 Nouveaux principes d'économie politique by Jean Charles Léonard de Sismondi.
  • Much economic theory also holds that the economy is usually at or close to equilibrium.

• Employment Levels

  • One kind of frictional unemployment is called wait unemployment: it refers to the effects of the existence of some sectors where employed workers are paid more than the market-clearing equilibrium wage.
  • When demand for most goods and services falls, less production is needed, consequently fewer workers are needed; wages are sticky and do not fall to meet the equilibrium level and mass unemployment results.

• Demand-Based Pricing

  • When a company sets an initially low entry price (lower than the eventual market equilibrium price) to attract customers, they are engaging in penetration pricing.