RESPOND WITH AT LEAT 150 WORDS, CITATION AND REFRENCE
Froeb, McCann, Shor, and Ward (2016) state “…the numbers of buyers and sellers are equal at the equilibrium price, so there is no pressure to change prices” (p. 99). When the availability of a product or service equals the demand for the product or service, even flow exists. However, if supply or demand changes, then there is a shift that makes it more difficult or easier to access the product or service, impacting the price. For example, over the past few years, lumber for home construction has seen a change in demand. One explanation for the change in demand is the devastation of whole communities by hurricanes and/or flooding in the southern states. Thousands of people have lost their homes, which has fuelled lumber demand.
I have friends who purchased land in East Tennessee City to build homes before the hurricanes and floods happened. They had to either wait or even stop building their houses after the catastrophe in the southern states because the price of wood increased dramatically.
Froeb, L. M., McCann, B. T., Shor, M., Ward, M. R. (2016). Managerial economics: A problem-solving approach (4th ed.). Boston, MA: Cengage Learning
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