New Blog 2: Real Estate Bubble In India

Thursday 8 November 2012

Real Estate Bubble In India

The price of an asset in a competitive market, economists tell us, occurs at the equilibrium level where the supply curve intersects the demand curve on a graph where price level lies on the y axis and quantity demanded lies on the x axis. This pricing theory, so elegant and simple, is the foundation of every course in economics, and is accepted as a universal economic truth that concisely explains consumer behavior in all corners of the free market. It is said that this model can be used to explain and predict changes in the price and quantity of goods sold, but unfortunately the usefulness of this model is limited by our ability to accurately ascertain the necessary inputs.