Impact of New Technology on the Market Equilibrium

Running head: MARKET EQUILIBRIUM
Market Equilibrium
Name of the Student
Name of the University
Author Note

MARKET EQUILIBRIUM
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Executive Summary
The paper is aimed at analyzing the impact of new technology on the market equilibrium. The
changes of the macroeconomic and microeconomic parameters indicate the direction of the
market equilibrium changes following the technical invention. The detailed impacts have been
discussed in this paper with the help of diagrammatic representation. Finally, the paper
concludes that technology can stimulate the average income of the economy.

MARKET EQUILIBRIUM
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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Supply and Demand Curve.........................................................................................................3
Production Possibility Frontier (PPF).......................................................................................8
Circular Flow of Income............................................................................................................9
Conclusion.....................................................................................................................................10
Reference List................................................................................................................................10

MARKET EQUILIBRIUM
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Introduction
Market equilibrium refers to the equivalent condition between market supply and market
demand. Equilibrium point establishes connection between the factors of demand and supply. It
defines the stability of the market. Meanwhile, the introduction of technology leads to the
improvement of the production of the market. In this regard, market equilibrium is expected to
get changed due to implementation of new technology. Several economic theories have notices
that technology innovation brings significant impact on the Production Possibility Frontier (PPF)
and circular flow of income. Present study attains to evaluate the impact of technology on
demand, supply, PPF and income for an economy (Nascimento et al., 2019). Further, the study
incorporates relevant examples to analyse the importance of the market equilibrium condition in
the economy. According to the economists, the market will never divert from the equilibrium
point if it reaches the market equilibrium condition. It has been observed that every market
definitely achieves the equilibrium condition even after experiencing with sudden market
fluctuation.
Discussion
Equilibrium of the product market can bring impact on microeconomic or
macroeconomic factors. The discussion of the paper emphasises on the microeconomic factors,
including, demand and supply, and production frontier (Balaman et al., 2018). On the contrary,
macroeconomic analysis includes circular flow of income. Companies or economies usually
introduce new technology with the aim of improving the growth.