Analysis of a Disequilibrium Transaction
A specialty store has been selling a particular collector's item for a stable price of $150 for several months. Suddenly, a new, more desirable version of the item is released by the manufacturer, causing demand for the older version to plummet. The store is now left with a large, unsold inventory of the old item at the $150 price. A potential buyer, aware of the situation, offers to purchase one of the old items for $110. The store owner, whose cost for the item was $90, accepts the offer. Analyze this transaction. Explain why the buyer was in a position to negotiate a lower price and why it was rational for the seller to accept it. Identify the value of the economic gain, or 'rent', that the buyer captured in this specific deal.
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Sociology
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Economics
Economy
Introduction to Microeconomics Course
CORE Econ
Ch.8 Supply and demand: Markets with many buyers and sellers - The Economy 2.0 Microeconomics @ CORE Econ
Analysis in Bloom's Taxonomy
The Economy 2.0 Microeconomics @ CORE Econ
Cognitive Psychology
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Analysis of a Disequilibrium Transaction
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Consider a market for concert tickets where a fixed number of seats are available. A popular band announces a last-minute show, and tickets are initially sold for $80 each. Demand for these tickets is extremely high, with many more people wanting to buy tickets at $80 than are available. A person who bought a ticket for $80 then sells it to another fan for $200.
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Match each term related to market disequilibrium with its correct description, analyzing the relationship between market conditions and participant actions.
A market for a popular brand of athletic shoes is initially stable. A famous celebrity is unexpectedly seen wearing the shoes, causing a sudden surge in the number of people wanting to buy them at the current price. Arrange the following events in the logical order that describes how the market adjusts through price-making behavior.
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Evaluating Competing Offers in a Disequilibrium Market
A local farm brings 200 boxes of fresh strawberries to a weekend market, pricing them at $10 per box. By mid-morning, they have sold all 200 boxes and notice that dozens of customers are still asking to buy strawberries. One of the early buyers, who purchased a box for $10, sees the high demand and offers to sell their box to a disappointed customer for $15. The customer agrees and buys the box. Which statement best analyzes this $15 transaction?
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In a market experiencing significant excess supply, any transaction occurring below the previous market price represents a disequilibrium rent captured solely by the buyer.
Match each market condition with the most likely outcome regarding price-making behavior and the potential for economic gains.
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