Supply and Demand

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Supply and Demand XECO 212 April 10, 2011 Supply and Demand In economics supply and demand refers to the relationship between the accessibility of a good or service and the need or wish for it amid buyers (Microsoft, 2009). Our daily lives are affected by supply and demand. Demand is based on the price of a product, the price of related products, and customer’s salary and preference. Supply can rest not only on the price available for the product but also on the cost of similar products, the method of how it is made, and the availability and price of contributions. In this specific case I will explain how supply and demand has affected my decision to purchase a home (The Free Dictionary, n.d.). Factors that Could Cause Changes…show more content…
Mortgage companies could not process and close loans quick enough; at times builders could not keep up with the demand of customers. Then in late 2009, business slowed quickly when big companies began having trouble staying solvent because of the foreclosure and bankruptcies once those buyers were unable to pay for the homes they purchased during the boom. When the economy took a downturn, the demand for homes shifted to the left because the need was less, consumer confidence faded, and availability of mortgage loan products decreased. Conclusion Unemployment is up, inflation is up, and the housing market continues to stall. The government has bailed out banks, given first-time homebuyer incentives, and lowered taxes, yet home purchases continue to drop. With high inflation, despite steady interest rates, there are many factors to take into account when choosing to buy a home. My concern is job stability and what is best for me in the long run. At this time I have decided it is best for me to continue to rent until the economy stabilizes and I save a larger down payment. References Microsoft. (2009). Encarta World English Dictionary. Retrieved from http://encarta.msn.com/dictionary_1861717135/supply_and_demand.html The Free Dictionary. (n.d.). Supply and Demand.

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