Article Summary/Economics - Essay Example

Article Summary Market equilibrium refers to a point where the quality demanded and the quantity supplied is qual. Thus, it occurs at a point where the supply and demand curves intersect. Usually, market equilibrium occurs at equilibrium price where the intention of the buyers and that of the sellers are balanced. When there is a surplus of goods, then it implies that the quantity supplied exceeds the quality demanded. This is usually observed when production is above equilibrium point. It may also occur because of price floor.

On the other hand a shortage of goods depict that the quantity supplied exceeds the quantity demanded. On the contrary, it occurs when production is below equilibrium point or when there is a price ceiling.Thus, on the basis of the above analysis, it clear that the market equilibrium may be applied in the process of economic recovery. For instance, strains in the economy may be attributed to lack of economic incentives. This ends up locking potential entrepreneurs out of business perpetuating disequilibrium in the market.

Therefore, for an economic recovery to be instituted, the government may introduce various economic incentives. Consequently, economic incentives encourage more investments, enhance technological innovations, enhance substantial cost saving and above all, enhances improved relationship between the public and the private sector. Basically, this is what is required to stimulate economic recovery. Thus, economic recovery may not be achieved through excessive government expenditure, increase in taxes, artificial stimulation or instituting various regulation.

Instead, economic recovery may be championed through stimulating the various economic incentives as mentioned in the foregoing paragraph. This may include enhancing the growth of small entrepreneurial business. Such businesses are accredited for fueling economic growth and create more job opportunities. This may be done through slackening the requirements for establishment of businesses and creating disincentives for business investments as well.The profusion of incumbent government regulations acts as a hindrance to new investments.

Thus, it could be perceived that such regulations perpetuate disequilibrium in the establishment of new markets. In order to ensure equilibrium in the establishment of new entrepreneurial businesses, removal of such hindrances is a necessary prerequisite.Works CitedSchwab, Charles. "Charles Schwab: Every Job Requires an Entrepreneur." Wall Street Journal. (2011): n. page. Print.