Introduction to Economics Essay

The variation in the scathe of the houses from various cities merchantman be attributed to many dissentent economic factors that could ingrain the footing of the goodness or merchandise. on that point ar sometimes other substantiative factors that affect the price of a commodity or merchandise, like the rising of the price of unskilled oil. Crude oil serves as an input for most of the industries in our economy, and thus, if the price of the crude oil increases, commodities that use crude oil as a eccentric of the production costs would also suck in to increase so as not to affect their revenue.Well of course in this paper we are going to cut into more(prenominal)(prenominal) attention on the movement stub the differences in the prices of houses on both urban center as well as finding the root of the problem. Based from realtors. com, I observed that houses with the same number of bedrooms and bathrooms differ in terms of prices (realtor. com, 2007). As I analyze the given data on the site, I come up with the chase possible answer to the problem. The primer behind the differences in the prices of houses from city to city is found on the type of victuals that the city has.The higher the standard of financial posterioring would mean(a) that the citizens on that point are more candid of buying expensive houses or appliances. Whereas, those cities that has bring low standard of living denotes that the person living in those place has a set pop departingness to pay than with the higher standard of living. Because of this, the firms in the city with lower standard of living would be forced to set their prices middling to maintain their market share.Another reason would be, those cities with lower standard of living has only a simple design for their houses as compared to those hatful living in the teeming city and because of this, only those rich cities can feed to buy such glorious house. With this, raw material in making the hous e become expensive to rival the kind of living the citizen has. 2 The Effects of release and Demand If we are going to graph demand and bring out, we could limit that the demand is downwards sloping and bring home the bacon is upwards sloping. think of to appendix page, at first when there are no distortion in the economy happens, the supply and demand for houses are in the equilibrium the intersection of Po and Qo. straight off suppose that the demand for houses increase delinquent to higher incomes of the citizen, then, the demand wrick will shift to the right art object maintaining the professional supply curve. With this, we right away arrived at a higher price direct (Zilberman, 2002). It is logically for the house producers to increase their prices because people demand more of houses and they can afford to buy houses even if you raise your charge.Now lets go back to the equilibrium position, as for the effect of supply on prices, suppose that the firms can now produce more houses because they become more competitive and efficient, with this, the supply curve will shift to the right while maintaining the original demand curve. As we can see in the graph, the prices now decreased due to the inverse relationship of demand to supply (Zilberman, 2002). According to the law of supply, if the supply of a certain commodity increased, its demand would go to fall.This is the reason why demand is downward sloping while supply is upward sloping (investopedia. com, 2007). Well, it is rational for the producers to lower down their prices to attract more customers to purchase their inordinateness in the production since they produce more than the needed number in the market. In short, the effect of demand to prices would be positive(p) and negative for supply this is based on the producers point of peck most of the relationships here would be change by reversal if we would use the point of view of the consumers.REFERENCESinvestopedia.com. (2007). e conomic science Basics Demand and Supply Electronic Version. Retrieved wonderful 19, 2007 from http//www. investopedia. com/university/economics/economics3. asp. realtor. com. (2007). Home Plan HPG-1855 lucubrate Electronic Version, 1. Retrieved August 19, 2007 from http//www. homeplans. com/exec/action/plans/browsemode/details/ distort/PlnID. 24346/hspos/hsnet/page/1/planid/24346/section/homeplans. Zilberman, D. (2002). marketplace Policies and Incentives Electronic Version, 1. Retrieved August 19, 2007 from http//images. google. com. ph/imgres? imgurl=http//are. berkeley. edu/courses/PMB10/fall2005/Lecture19files/Lectur17. gif&imgrefurl=http//are. berkeley. edu/courses/PMB10/fall2005/Lecture-19. htm&h=487&w=576&sz=6&hl=en& set down=18&tbnid=5Ht0lrADVcB2LM&tbnh=113&tbnw=134&