Econ 210 - Assn 2-2 - went up because more and more people...

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Econ 210 - Assn 2-2 Assignment 2-2 ECON 210
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Econ 210 - Assn 2-2 Discussion Paper 2: Price Mechanism For a market to be in equilibrium, or market equilibrium, the demand of an item is exactly equal to its supply, the two supply and demand would be equal, if they are equal, there would be no shortage or any surplus in the market, and if this is the case the price would tend to remain more stable. There is a fuel station about a half a block from my house that I drive by every day. I remember when I was a kid just learning how to drive, the fuel station by my house back then sold fuel for $0.89 cents a gallon and the price stayed around a buck a gallon for many years. Now the fuel station by my house the price changes every time I drive by, it would be one price in the morning and a completely different price in the afternoon returning home from work. I think ever since the cell phone was introduced as a must have for everyone, the demand for fuel
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Unformatted text preview: went up, because more and more people are now out on the road doing business on the go. More money in their pockets, more of a demand for fuel, excess demand causes the price to rise. The housing market, excess supply causes the price to drop. My father is looking to retire soon and Florida is a place where he was looking. Some of the properties there in Florida used to sell for well over $270,000 now are being sold for just over $100,000. I told him that he should sill spend the $270,000 and buy 3 properties and rent the other two out. Price mechanism is a fancy way of saying bartering or negotiating the price . There is a lot of economies that still use bartering as a way to do business. By using price mechanism, this tactic helps to keep the price more stable and not cause the price to increase and decrease as much under outside influences. Econ 210 - Assn 2-2 References None...
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Econ 210 - Assn 2-2 - went up because more and more people...

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