Surplus and Shortage; Supply and Demand (November 21st, 2011)

Supply and Demand curve in the market of acoustics:
Quantity of demand = Quantity of supply
Demand captures willingness and ability to pay.
This is where it is coordinated and how people's behaviors will to change when the prices changes.

Two questions:
How does each half of the market respond?

• Buyers and Sellers

What plans are satisfied?

• Buyers and Sellers

If the quantity is higher, when prices goes up, quantity demand decreases. Who's plan does this satisfy? Buyers!
They want the price to be high, they can try to slowly meet the demand. Given the price, they would not change the behavior.
At p= $900, quantity supply > quantity demand, by 400 sales.
When quantity supply exceeds the quantity demand does not expect the surplus, it only does at a specific price.
Quantity demand is higher, quantity price is lowered. Sellers benefit from it and buyers do not.
At $300, quantity demand > quantity supply by 400 guitars. The equilibrium point is the middle point of supply and demand.

When prices are increasing, shortages are being eliminated. Low prices can be relatively unscarse. Scarcity is the relative abundance of a good.

Two types of equilibrium:
If wood falls, supply will shift.
If electric guitars increase, demand will shift.