econometric changes in the market concerning supply-demand transformations

econometric changes in the market concerning supply-demand transformations

Economic theory describes the econometric changes in the market concerning supply-demand transformations. The application of supply and demand curves is evident in the current industry and housing plan, as portrayed by the DFW area. The area covers about 100000 people who visit the city every year to settle in one of the residential areas in the region. The drifts in demand and supply of housing in the area show that there is an economic theory that is applicable in determining the prices and construction of houses in the DFW area.

Since the society in the DFW area possesses various productive resources that can be used to construct houses according to the demand, the interplay between demand and supply of housing in the DFW area is customized according to the number of people flowing into the region. People who live in the DFW area are over a hundred thousand, and every year the population increases. For that reason, the demand for housing is high hence making investors focus on increasing more houses in the DFW area according to the need for homes by the inflow of people. The high demand for apartments has increased in the price of housing in the DFW area.

An interplay of supply and demand and the economic theory proves that the more people demand houses, the more the prices of housing will increase in the future. Demand and supply result in a change in the economic value of housing in the DFW area hence resulting in a dramatic shift in normative economics. An increase in demand for the houses proves that the supply curve will typically shift to the right since an increase in supply results in a shift in the supply-demand curve. An increase in supply demonstrates that it is slightly up outpaced by the stipulated increase in demand for housing.

Additionally, an increase in demand will increase supply. For that reason, an increase in supply will lead to a change in the equilibrium quantity, which also results in a change in equilibrium price. Equilibrium price will then be required to be determined as long as people keep on flowing into the DFW area in search of housing. The housing market is rendered to be a competitive market in the region that requires equilibrium price to be consistently be determined to find a reasonable price for the houses located in the DFW area. Demand will eventually be higher than supply; hence the cost of housing will increase.

The concepts related to the demand for housing in the DFW area and how the market is typically getting to the point of making the demand for housing to be higher than the supply can be graphically demonstrated, as shown below.

Supply is low as compared to the increasing demand for houses. For that matter, the quantity demanded is seen shifting Q1 to Q2. Hence, the demand curve shifts from D1 to D2. A change in demand from D1 to D2 results in an increase in the price of housing from P1 to P2. By viewing the demand and supply curve in the DFW area in regards to housing, the demand for houses, and the supply on the ground, it is reasonable to conclude that the demand for housing will result in a home is being valued higher than the previous years. The future value of houses in the DFW area will increase since the demand will be extremely high in comparison to the supply of housing in the DFW area and the topological capability of the DFW area to accommodate more houses. The real estate price will typically get higher in the coming future so long as people keep on moving into the DFW area in search of housing. According to McConnell, Brue, and Flynn (2009), equilibrium price can only be attained if the movement of people controls the demand for houses into the DFW area.

According to the economic theory, the control of the equilibrium price of housing in the DFW area can only be achieved by controlling the demand for housing. The need for housing can also be controlled by involving the government to control the migration of people to the DFW area. The current countdown of over 100 thousand people present in the DFW area and the continued increase of people moving into the DFW area guarantees the area to be a possible region that will result in a constant change in the equilibrium price.

Purposeful behavior is an economic perspective that describes the reason why the kg price of housing in the DFW area will continuously change. So long as the purpose of people moving into the DFW area is still present, there will be a constant change in the price of housing since the demand for housing will continue to be higher than the supply in the region. The cost of accommodation will increase irrespective of the quality of the house. High demand for housing will compromise the quality of housing in the DFW area (McConnell et al., 2009). Most people will take advantage of an increase in demand to construct substandard houses in the DFW area so long as the population in the DFW area increases year after year. Concerning marginal analysis and comparison of cost and benefits of constructing houses in the DFW area, high possibilities that most investors will consider building cheap and straightforward housing to meet the demand for housing in the region.