Supply and Demand
Discuss and analyze following statement:
The Wall Street Journal reported that recent law school graduates were having a very difficult time obtaining jobs in the legal profession. Many law schools said that 10 to 20 percent of their graduates still had not found jobs. The historical average had been 6 to 8 percent. Many recent graduates were taking jobs outside law at much lower wages than were typically paid to beginning lawyers. Based on this information, what would be your prediction about lawyers' salaries for the future? Please explain your answer in terms of the market for lawyers fully explaining what changes will occur to demand, supply, quantity demanded, quantity supplied, and equilibrium price for lawyers (starting wages for lawyers).
Reference & definitions according to my textbook:
Supply and demand analysis applies principally to markets characterized by many buyer and sellers in which a homogeneous or relatively non-differentiated good or service is sold. Such markets are called competitive markets. In completive markets, individual firms are price-takers because prices are determined by the impersonal forces of the marketplace; thus, demand and supply.
Analysis of competitive markets by describing the buyer side of the market called the demand side of the market. The seller side is called the supply side. When the demand side and the supply side combine, it shows how prices and quantities sold are determined in a market. Finally, show how forces on the demand side or the supply side of the market can change and thereby affect the price and quantity sold in a market.
1. Quantity Demanded - the amount of a good or service consumers are willing and able to purchase during a given period of time (week, month, etc.).
2. Quantity Supplied - the amount of a good or service offered for sale during a given period of time (week, month, etc.).
3. Equilibrium price - the price at which Qd = Q5'
I have provided an example of a discussion post (single-spaced; no title page, etc.) to be used as reference when completing the assignment above:
Economic Theory Simplifies Complexity
Practical solutions to challenging real-world problems are seldom found in cookbook formulas, superficial rules of thumb, or simple guidelines and anecdotes. Profitable solutions generally require that people understand how the real world functions, which is often far too complex to comprehend without making the simplifying assumptions used in theories. Theory allows people to gain insights into complicated problems using simplifying assumptions to make sense out of confusion, to turn complexity into relative simplicity. By abstracting away from the irrelevant, managers can use the economic way of thinking about business problems to make predictions and explanations that are valid in the real world, even though the theory may ignore many of the actual characteristics of the real world (Thomas & Maurice, 2011).