Reflection

I feel that I have learned a lot more about Economics from this class and that it will impact me in the future greatly. I am glad that I had the opportunity to learn so much from this course in such a short amount of time. I feel that this Economics course was pivotal to my understanding of how to handle my financial situations in the future and have more confidence in my ability to be able to deal with economic situations in my adulthood. This has been a very well-rounded educational experience for me to have learned from and I am also glad that my teacher was able to relate what we were learning to something that we enjoy, for a more capable learning experience. Overall, the class was good, could have been a bit more fun, but what are you going to do? I hope everyone else got as much out of it as I did.

There is much competition in the markets of guitar sales in many different market structures in the U.S., including perfectly competitive, monopolistic, monopolistic competitive, and oligopolistic. The most popular market for selling brand name guitars is a perfectly competitive market. Some characteristics of a perfectly competitive market are having many buyers and many sellers, all firms sell identical goods, buyers and sellers have relavant information about prices, product quality, sources of supply, etc. and firms have easy entry into and exit out of the market. Because of the four characteristics of a perfectly competitive market, sellers in this market end up being price takers.

There is also a monopolistic market (such as Fender). Some characteristics of a monopolistic market is that the market consists of one seller, that single seller sells a product that has no close substitutes and the barriers to entry are high, which means that entry into the market id extremely difficult. A monopoly firm (or monopolist) is a price searcher. Price searchers can sell some of their product at various prices, like Gibson, for example. A public franchise is a right granted to a firm by government that permits the firm to provide a particular good or service and excludes all others from doing so. So, any potential competition is thus eliminated by law. Sometimes, companies will have such a low average cost that they make a natural monopoly for themselves, like how Gibson was before Fender came into the scene. Although, there are no monopolies anymore, because it is illegal, due to antitrust laws. These laws are meant to control monopoly power and to preserve and promote competition. There never exactly has been a monopoly in guitar sales, anyway, though.

Specifically, monopolistic competitive markets don't exist anymore, in essence, but I'll explain them, anyway. The market includes many buyers and many sellers, the firms produce and sell slightly differentiated products and the firms have easy entry into and exit out of the market. There is no guitar market that was like this that comes to mind.

In the world of guitar sales there are many business firms, organizations that use resources to produce goods and services that are sold to consumers, other businesses, or the government. Epiphone, Gibson, Fender and Marshall are just a few of the many numerous and diverse guitar business firms in the guitar industry. Right now, Fender is putting forth less effort into their guitars than they used to and that's why their sales are going down. This is called shirking, when less effort is put forth than what was agreed to. This effects the whole industry, because their sales fall overall and make the business firm less efficient at what it is they do, possibly ending up in a lower salary. A sole proprietorship is a business that is owned by an individual, who makes all the business decisions, receives all the profits or takes all the losses of the firm, and is legally responsible for the debts of the firm. Gibson used to be a sole proprietorship made and run by an individual witht he last name Gibson. Once, he died though, the business was taken over by his children and other business partners that were close friends. But, at the time it was a sole proprietorship Mr. Gibson took all profit, losse and was legally responsible for all debts of the firm. Once he deceased, the business was made into a partnership by his children, who inherited the business. A partnership is a business that is owned by two or more co-owners, called partners, who share any profits the business earns and are legally responsible for any debts incurred by the firm. Fender is an example of a corporation, which is a legal entity that can conduct business in its own name in the same way that an individual does and is owned by it's stockholders. Stockholders are people who buy shares of stock in a corporation. There are many stockholders that invest into Fender, because of their great success. These stock holders own some stock of the corproation that they invest in, putting a claim on the assets of the corporation. Assets are anything of value to which the firm has legal claim, such as guitars, amps, cords, pedals and other products they may produce. The owners of a corporation are not personally liable for the debts of their corporation, but thay have limited liability, meaning that they can not be sued for the corporation's failure to pay it's debts. One of the important decision-making bodies in a corporation is the board of directors, who determine corporate policies and goals. All corporations have a board of directors, including guitar corporations, it is manditory. There is also a franchise. A franchise is a contract by which a firm (usually a firm) lets a person or group use it's name and sell it's goods and services. Gibson is an example of a franchise that sells it's name so that smaller companies may get better sales, when they sold their name to Epiphone. The franchiser is the entity that offer the franchise. In this situation the frnachiser would be Gibson. The franchisee is the person or group that buys the franchise. In this situation the franchisee is Epiphone, because they bought Gibson's name.

Some guitar companies put fixed costs on a few of their products, meaning that no matter how many of that product are made, the price never goes up. This keeps products at a reasonable price, so that consumers do not complain. But, most products are under a variable cost policy, meaning the cost of the product will vary with the number of units of the good produced. When fixed costs and variable costs are added together the total cost is accumulated. You can get an average total cost by dividing the total cost by the quantity of the output. The change in total cost that results from producing an additional unit of output is called marginal cost. Any price that goes up due to producing an additional unit in economics will result in a marginal cost.

The change in total revenue that results from selling an additional unit of output is marginal revenue. This is, basically, the opposite of marginal cost, which I explained earlier. The economic law, the law of diminishing economic returns states that if we add additional units of a resource to another resource that is in fixed supply, eventually the additional output produced will decrease.

There is a demand for guitars and their parts because of so many people that play guitar at home, concerts, shows, presents, aspiring guitarists, etc. So, guitars and their parts are sold and bought every day, because of this demand. The quantity demanded for guitars and guitar parts is very high and very frequent, because the demand for them is so high. Bands, guitarists, studio musicians and recreational players all need their guitars, so the market allows spikes in guitar prices for certain brands and deals for others.

The sales of guitar do not necessarily follow a demand schedule per se. The demand for guitar has been very constant since its introduction, but has been slowly going up on a worldwide scale. Although, the scedule has experienced some change lately. The only big change was when it was being popularized through media in the 1950s and 60s.

The law of demand is a thereom designated to help the user find out the price of a product based on the quantity demanded. Guitars and guitar parts are a normal good in my case, because I will always be buying extra strings, pedals, amp enhancing modules and what not with all the extra money that I can spend on leisure goods. For me, light gauge strings are an inferior good, because I spend more money on heavier gauged strings rather than light. A nice substitute for heavy gauged strings are the medium gauged strings, because they do not cost more and they are not as thin as light gauge strings, so I can still get a thicker sound from my guitar. Cry Baby pedals for my guitar is a neutral good, because no matter how much money I have, I am only going to need one Cry Baby pedal, because it only makes one sound and unless it breaks, I will not need another one. Complements to my guitar would include amps, pedals, picks, strings, whammy bars, etc. that would enhance my guitar-playing experiences.

The demand for older amp motherboard pieces is going down by the day, because everyone is buying newer and improved amps. But, the price of these pieces rise steadily, due to a limited resource. This is an example of elastic demand, when the quantity demanded changes by a percentage greater than the price. The demand for newer amps steadily decrerases with each new model that comes out, but the old models made still must be sold and profited off of, so the price goes up a lot with inflation. This is an example of inelastic demand, when the quantity demanded changes by a smaller percentage than the price.

Supply. This refers to the willingness and ability to of sellers to produce and offer to sell different quantities of a good at different prices during a specific time period. Supply is related to everything and anything in the market, including guitars and guitar parts. There is also the law of supply, which states that as the price of a good increases, the quantity supplied of the good increases, and as the price of a good decreases, the quantity supplied of the good decreases, regulating the general pattern of the sales of any item in a market. Quantity supplied refers to the number of units of a good produced and offered for sale at a specific price. For example, a store is selling five guitar cables for eight dollars. In this situation, five is the quantity supplied at this price. A supply curve is a line that slopes upward and shows the amount of good sellers that are willing and able to sell at various prices. Generally, guitar sales fall in a well-rounded supply curve, due to so many companies and stores that are willing to sell their products at diverse prices. A supply schedule is an illustrated chart that shows the law of supply. These charts generally show how much a widget costs at a certain quantity. Elastic supply exists when the quantity supplied changes by a greater than the price. When the supply of picks is extremely abundant the price won't change very much. Even through high sales, the stores will just keep restocking and keep the price steady. This is when elastic supply exists. Inelastic supply exists when the quantity supplied changes by a smaller percentage than the price. Say, new amps are selling well and the supply of them is staying generally constant, but due to the good sales, companies decide to raise the price of their amps. This is when inelastic supply exists.

A shortage exists when the quantity demanded is more than the quantity supplied. Right now, there is a shortage of germanium transisters for old amp motherboards, because companies now use silicon transisters, because they are cheaper, they work better, and there is a more abundant supply of them. So, all of those who need germanium transisters need to get them specially ordered and made. A surplus, on the other hand, is the opposite of a shortage. A surplus is when quantity supplied is greater than quantity demanded. Right now, there is a surplus of Fender guitars, because they cost so much and Gibson is starting to take over the elctric guitar scene along with Epiphone. Equilibrium is when the quantity demanded is the same as the quantity supplied. Right now, there is an equilibrium in the sales of guitar straps, where the amount of quantity supplied is generally equal to the quantity demanded. The equilibrium quantity is the amount of guitar straps bought and an equilibrium price is how much the guitar straps are selling for right now.

Welcome!
I am going to take this opportunity to introduce my blog to you. I am a student right now, taking an economics course and it is my job to understand how supply and demand in our market effects the economy. I made this blog to help me better understand supply and demand in my economics class by relating the subject matter to somehting I enjoy. I am hoping that this will allow me to get a better grasp of what supply and demand is all about. Personally, I would rather just talk about guitar, but for now, I have to explain how guitar sales effect the economy. Anyway, if anyone has an opinion on how the sales of guitars and guitar parts effect supply and demand in our economy, please post it so that I may learn from your personal advice.
Thank you.