ECO 561 Week 2 Complete


Learning Team Deliverable

Prepare a 350-700 word paper in APA format reflecting upon the weekly topics. Discuss which topics you struggled with, and how the topics relate to your field.


Equilibration is the process of moving between two equilibrium points as a result of some change in supply or demand.  Understanding how market equilibrium is sought following such a change is essential for business managers. It is important to understand how economic principles, and specifically supply, demand, and their determents are a part of your everyday business decisions.
Prepare a PowerPoint presentation to present in class or prepare a paper using a real world experience in a free market (not government regulated) to describe a change that occurred in supply or demand as a result of world events that led to the need for a move between two equilibrium states.  Explain the process of how that movement occurred using behaviors of consumers and suppliers.  Graph the movement between the two points as well.


Required Elements:

  • Include academic research to support your ideas
  • Consider the Law of demand and the determinants of demand
  • Consider the Law of supply and the determinants of supply
  • Describe Efficient markets theory
  • Explain Surplus and shortage
  • Deliver the content in no more than a 700-word paper, OR  7- to 10-slide Microsoft PowerPoint presentation (Please choose one of these choices, not both)
  • Use University of Phoenix Material: Appendix A to create graphs illustrating the movement between the two equilibrium points and include this in the body of the assignment.
  • Your assignment is consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment.


ECO 561 Week 2 Complete

Learning Team Deliverable

The team debated over three different cost or expense concepts in business economics. The first topic dealt with fixed and variable costs and how these costs related to supply and demand. Fixed costs are costs that will not vary regardless of the changing outputs and paid out even if the outputs are zero. On the other hand, variable costs are the cost that will vary based on the levels of outputs produced by the business and those costs changes directly with the level of outputs. Items such as raw materials and most labor cost are variable because they can change over time (McConnell, Brue & Flynn, 2009). Understanding both the fixed cost and the variable cost would help business get a better handle on the total cost associated with operating a business. In business economics, cost and knowing the effecting controllers, allows managers to adjust accordingly. Businesses overall, need to know where money is going, when and where they need to cut expenses, and when they need to produce more to offset the cost. As the demand for a product or service increase, the company would need to understand when it should increase its supply for that product or service. It seems simple, but there is much more that goes into increasing supply to meet demand; such as a change to the company’s variable cost and transferring the cost to consumers.



Market Equilibration Process


To conduct any business in the market there are two sides supply and demand that needs to interact with each other. The market equilibration process is the process where suppliers supply product to the exact quantity demanded and there is no excess product. This results in efficient market to conduct business. This paper describes how housing prices in market is affected by changes in supply and demand so that we can have better understanding of equilibration process.

The main concepts in economics are supply and demand in a market to conduct business. Law of demands states that for any goods or service as the value falls, the amount demanded rises and also when worth rises, the quantity demanded drops (McConnell, Brue, & Flynn, 2009). The relationship between price and quantity is negative and downward sloping curve as seen in Figure (b) in Appendix A. Price is one of the main factor related to quantity demanded but there are also other factors known as determinates of demand such as buys preference, number of buyers, incomes of buyers and prices of related goods (McConnell, Brue, & Flynn, 2009).

Law of supply say that quantity supplied increases as price increases and as quantity supplied decreases value also decreases (McConnell, Brue, & Flynn, 2009). Quantity and price are directly related to each other therefore creates upward sloping curve as seen in figure (c) in Appendix A. Like demand, the efficiency of supply are determined by factors such as technology, taxes, resources prices, number of sellers and producers expectations(McConnell, Brue, & Flynn, 2009).


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