ECO 2302

Demand, Supply, and Equilibrium of Manufactured Housing Industry

VIRGINIA S. TOWNZEN

COLUMBIA SOUTHERN UNIVERSITY

MACROECONOMICS ECO 2302-21.01.00-4B23-S2

Unit II Essay

Professor Seifu Zerihun

03/08/2023
 Demand, Supply, and Equilibrium of Manufactured Housing Industry
Introduction

This week in Macroeconomics we are learning about supply, demand, and equilibrium.

These are the fundamental concepts and the foundation in economics. The author Erbschloe

defines macroeconomics as “a discipline that focuses on the study of trends or events and how it

impacts the entire economy as a whole” (Erbschloe, M., 2021). I have chosen the manufactured

housing industry for my project to conduct my research on. I will be studying this industry and

its current status of supply, demand, and equilibrium. I will interpret the current status of the

industry and the recent factors that have impacted this industry. Manufactured homes have been

around for a long time and have evolved into some of the safest dwellings being built today.

They have become a means to an end to the supplied shortage of housing on the market and they

are much more affordable than the demand alternatives.

Demand Curve Movements and Shifts

Our textbooks define demand as the quantity consumers are willing and able to buy at

each price level, over a specific period (McEachern, 2019). I read in our textbook that the

demand curve is the relation between the price of a good and the amount the consumer is willing

able to purchase (McEachern, 2019). The demand curve is affected in one of two ways, either a

movement along the curve or a shift of the demand curve. A movement along the demand curve

can only be caused by a change in price of the goods being sold, which results in a change in

quantity demanded (McEachern, 2019). The shift in the demand curve is due to a change other

than the price of a good being demanded. There are five factors that cause a demand curve to

shift, they are as follows: 1) Consumer incomes, 2) consumer expectations, 3) price of other
goods, 4) number of consumers, and 5) consumer taste. A demand curve slopes downward to the

right, and this is considered an increase, and downward to the left is a decrease.

Supply Curve Movements and Shifts

The definition of supply is the amount of a good or service a supplier is willing

and able to produce to meet consumer demands. The law of supply is the opposite of the law of

demand and is a fundamental principle that states there is a direct relation between quantity and

price supplied and all other factors remain the same. To simplify, an increase in price will also

increase the quantity supplied and vice versa. The market supply curve shows the quantity of

homes supplied at each price level for a specific period, all other factors held constant. Change in

the quantity supplied caused by a change in price is known as a movement along the supply

curve. A change in any other factor besides price and quantity demanded will result in a shift in

the supply curve. The supply curve slopes upward to the right for an increase and upward to the

left for a decrease.

Equilibrium

Equilibrium is the point where the demand curve and the supply curve cross, and they

are equal to one another (McEachern, 2019). Each time the demand or the supply curve shifts

the equilibrium will also change. The market equilibrium is a representation of the intersecting

point of supply and demand (VĂDUVA, C., 2021). An increase in demand will cause an

increase in equilibrium price and an increase in equilibrium quantity. When the supply curve

remains the same and the demand curve shifts to the right or increases both the equilibrium price

and quantity will also increase, but if the demand curve shifts to the left or decreases both the

equilibrium price and quantity will decrease. If the demand curve remains the same and the
supply curve shifts to the right or increases the equilibrium price will decrease and equilibrium

quantity will increase, but if the supply curve shifts to the left or decreases the equilibrium price

will increase and the equilibrium quantity will decrease. If both supply and demand shift to the

right equilibrium quantity will increase or if they both shift left the equilibrium quantity will

decline, but without knowing the extent of the shift I cannot forecast equilibrium price.

My Chosen Industry

The real estate market is complex and country specific. It is subject to never ending

changes that are influenced by the state of the nation, the economy, the wealth of citizens, the

available capital resources, and more (Skotarczak, T., 2021). The housing market has seen a rise

in the demand for housing, but the supply of housing has been experiencing a decline due to

shortage of labor, increase in material cost, and bad weather. Housing costs have grown

tremendously making it hard for some to get the financing they need.

Conclusion

By analyzing the demographic, social, and economic factors economists can forecast the

future direction of the housing market (Skotarczak, T., 2021). Forecasting the future of the

housing market is complex and has its share of challenges, but it can be done.  The author Eisen

stated, “as the law of supply and demand takes hold of the housing market, it could be some time

before we see a return to equilibrium” (Eisen, B., & Friedman, N., 2021).
 References

1) Eisen, B., & Friedman, N. (2021). Home Prices Are Surging. The Manufactured-Housing
Industry Sees an Opening. The Wall Street Journal Eastern Edition, A1.
2) Erbschloe, M. (2021). Principles of Macroeconomics. Salem Press Encyclopedia.

3) Jeong, J. G., Hastak, M., Syal, M., & Hong, T. (2013). Framework of Manufacturer and
Supplier Relationship in the Manufactured Housing Industry. Journal of Management in
Engineering, 29(4), 369–381.
https://doi-org.libraryresources.columbiasouthern.edu/10.1061/(ASCE)ME.1943-5479.0000164
4) McEachern, W. A. (2018). ECON MACRO (6th ed.). Cengage Learning
US. https://online.vitalsource.com/books/9781337671804
5) Skotarczak, T. (2021). The phenomenon of an overreaction on the housing market. World of
Real Estate Journal / Swiat Nieruchomosci, 115, 48–67. https://doi-
org.libraryresources.columbiasouthern.edu/10.14659/WOREJ.2021.115.03
6) VĂDUVA, C. (2021). Conceptual Evolution of Prices and Competition. Annals of
“Constantin Brancusi” University of Targu-Jiu. Economy Series, 1, 186–189.
7) “Worldwide Manufactured Housing Industry to 2027 - Technological Advancements &
Innovations Present Opportunities - ResearchAndMarkets.com.” (2021, ). Business Wire, NA.
https://link-gale-com.libraryresources.columbiasouthern.edu/apps/doc/A649194323/ITOF?
u=oran95108&sid=ebsco&xid=3849b9d7
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