Market Equilibrium

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When Market equilibrium occurs is knowing when the economy is in good standing. Not like it is today. Inflation is at its worse I have ever seen and I hope things can back to before. Anyways, to get back to the subject, consumer and seller relationships are very important to understand. A seller needs to know how products to stock to make good sales and to have quality products consumers can afford without costing bankruptcy on a business but not too high to drive away a sale. In today’s economy is ridiculous. We are in short supply for just about everything and the prices for high demand of a product that there is not enough to supply. Prices have been going up. I can’t speak for anyone but I went from buying all name brand products and now considering going back to cheaper versions because it’s getting harder to afford these new items. I was speaking with someone recently about buying an Xbox. The person had told me that there is a shortage. And any that were left were bought and now being sold nearly triple the original cost.


Market equilibrium occurs when supply and demand are balanced and creating stable pricing, which we see graphically where the supply and demand curves intersect.

With another kid on the way, I wish it was a better time to buy a bigger home at a reasonable price, My frustation has been that there are few houses available on the market to buy, which has driven up pricing and making the market very competitive. This market scarcity has been compounded since the pandemic began, with fewer people willing to sell and move. Homebuilding had ceased for a while, and the materials used to build them has skyrocketed due to factors that many of you have commented about, including supply chains and other market production being disrupted like lumber. Because of all this, the main effect has been that homebuyers are competing for a very limited supply of available houses. 

To bring the housing market back into equilibrium, supply needs to catch back up to demand. Once sellers are putting their houses on the market again, the inventory levels will rise, and hopefully prices fall back to where home values should be. Also, we should see the effects of homebuilding being back in full swing, which will help housing inventory.

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