Eco 561: Market Equilibration Process

Market Equilibration Process
ECO 561
April 24, 2014

Market Equilibration Process
This paper is to discuss a real word experience in a free market. Explaining changes which happen with demand and supply as a result of a world event is the main objective which will show equilibrium. This paper will explain the development of the equilibration movement which occurred using behavior of supplier and consumers with a graph to explain.
During 1997-1999 the economic decline in Indonesia made progress in reducing food insecurity and poverty. People in poverty because of the economic decline. The number of people in poverty increased from twenty-three million people to a little under fifty million people according to a survey given (Sawit…show more content…
The farmers would withhold rice from the markets when the prices. With the shorten supplies domestic rice prices rose more than 60% in 1998 from May to August triggering panic. The demand decreased. No one could afford the high prices rice because the taxes on selling and trading were lower. The government would establish price for the poor to buy rice to the United States food stamp programs (Flynn S. & Brue S, Campbell A. Cronell,…show more content…
The argument to this theory can be overtax on the economic can cause hardship and rundown markets.

The high price of supplying rice generated a change demand of elasticity which consumer need to purchase more rice property owner along the lines shift the curve demand to the right from S1 to S2 factoring the income had an reaction on the acquirement of causing a change in consumer outlook. Less consumers buy when prices are higher is the law reaction of the consumers. With the crisis in Indonesia favorably to the high price incurred on rice. The government needed to step on the behalf of the people.

References:
Ball, L. M. (2009). Money, banking, and financial markets. New York, NY:Worth Publishers.

McConnell, C. R., Brue, S. L., & Flynn, S. M. (2009). Economics: Principles, problems, and policies (18th ed.). Boston, MA: McGraw-Hill Irwin.

Pugel, T. A. (2009). International economics (14th ed.). Boston, MA: McGraw-Hill Irwin.
Sawit, M. H., & Tabor, S.R. (2001). Social Protection Via Rice: The OPK Rice Subsidy Program in Indonesia. Retrieved from