Market Equilibrium

Market Equilibrating is the process by which a price is reached that is acceptable to both the buyers and sellers of a good or service(Welker's Economics, 2011). As supplies and demand change the prices will fluctuate accordingly, until the equilibrium is found. Recently I have encountered a market that is unique in that it has two separate supply and demand curves that must reach equilibrium together in order to provide the best profit for the industry, and the best prices for customers. This is the cellular phone and service market.

While shopping for a phone I found that there was an abundance of phones on the market. This drove down the prices of even the most elaborate models because they were competing for sales with hundreds of other models that were in great supply. A large variety of manufacturer's, models, and options on phones gave me the edge on buying exactly what I wanted at a low price. This surplus is causing rapid price fluctuations as older models become less desirable and more available, pushing the equilibrium down. However, constant technological improvements are added to these phones, and as these newer more complex phones are released the equilibrium is pushed back to a higher price. The constant flux in this industry is a great real time study of equilibrium transitioning in both directions along with the constant cycle of aging technology being replaced with new technology.

After selecting a phone I became witness to another branch of this market that is suffering from constant shortages in contrast to the surplus of hardware. The service branch has to deal with incomplete coverage areas, since the entire country does not have cell phone reception. This actually pushes prices down as it is a lack of service, not so much a shortage. However, many cell phone companies are now posting restrictions and greatly increasing prices on the internet usage of phones due to the high demand we place on cyberspace,