Gabriel Feldman
Period 2
Chapter 4 is centered around supply and demand. If the price goes up, demand goes down and vice versa. Like if the price for computers increased significantly, less people would by them in an order to save money. In supply, price and supply have a positive correlation, both increasing and decreasing together. If prices go up, demand goes down, and the sellers are left with a surplus of goods due to the lack of consumers buying their products. People naturally want to get more for less, i.e. have a lower opportunity cost. It was interesting reading about how society's decisions have so much power in markets. For example, if society thought it best, they could drive a huge company like Microsoft into the ground very easily.
The concept and mechanics of equilibrium were intriguing, such as how a market naturally drifts towards equilibrium. Also how someone can figure out the state of a market by looking at where the market price is related to the equilibrium. Surplus occurs when the market price is above the equilibrium and a shortage occurs when the market price is below equilibrium. What surprised me however were competitive markets. The fact that in a competitive market, a seller could drastically change his price and not have any influence in the market. Although, if they lowered the price enough and for a long enough period for time, couldn't they undercut and drive out at least their nearby competition? In which they could have a sizable affect on the market. Through this they could create a monopoly correct?
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