Market Forces of Supply and Demand, Essay Example

The business market in today’s world is very complex, particularly because of new technologies and automation in how consumers access products and services in the marketplace. What is the marketplace? According to Mankiw, the market is made up of the group of buyers and sellers of particular goods and services. The demand for these goods and services are determined by the buyers and the supply for the goods and services are determined by the sellers in the market. In addition, markets are competitive in the business arena, and competitors often have certain advantages over each other, especially when one of them “drops the ball” in some way. For example, JPMorgan Chase & Co., the largest banking corporation in the United States, recently “dropped the ball” with data breach. This breach comprised personal information for 76 million households and 7 million small businesses, according to(Dmitrieva and Riley).

What this implies about supply and demand is that JPMorgan’s demand likely dropped for a undetermined amount of time, due to a fall in consumer confidence, while the facts continue to be reported about the breach. Consumers, are understandably concerned about what information was breached and whether or not their accounts were among the millions affected. Regarding, JPMorgan’s competition concerning this issue, no doubt, they may be using this as an opportunity to gain some competitive advantage over JPMorgan, while some of its customers may be feeling vulnerable because of the breach incident. As far as supply and demand is concerned, this means there are only so many buyers and sellers in the market and each has an impact on market pricing(Mankiw). Therefore, perhaps JPMorgan’s competition could begin offering some type of discounted products and services, using the fact that they may have never had a breach, to steal away some of the JPMorgan’s customers.

Additionally, JPMorgan’s breach likely caused a temporary shift in its demand curve, because this was something that happened to alter the quantity demanded(Mankiw), which was JPMorgan’s services, at least for a time. The scare of having one’s account information exposed and the thought of having hackers gaining access to one’s funds is enough to stop one from wanting to use a particular bank’s services for a while, if not indefinitely. This has to do with the demand curve, which is shifted to the left with a decrease in demand occurs, such as with a bank breaching personal information.

It is interesting to that the article states that JPMorgan verified that no “account numbers, passwords, user IDS, dates of birth, or Social Security numbers” were taken, just “names, phone numbers, addresses, and e-mail addresses”(Dmitrieva and Riley). However, how can that be? No doubt, all customers are wondering if this is completely true, those affected as well as those there were not affected. It makes people think twice about using online banking or other electronic services again. People are concerned with hackers draining accounts and whether or not their money is safe; however, JPMorgan reports not seeing any such fraud resulting from the breach—yet. That could very well be on the way. This would certainly affect supply and demand for JPMorgan in a major way, if money started disappearing from people’s accounts, which is a scary thought.

Works Cited

Dmitrieva, K. and M. Riley. Here’s What You Need to Know About JPMorgan’s Data Breach. 2 October 2014. Web. 9 October 2014. <http://www.bloomberg.com/news/2014-10-02/here-s-what-you-need-to-know-about-jpmorgan-s-data-breach.html>.

Mankiw, N. G. Principles of Economics. 6th. Mason: South-Western, Cengage Learning, 2008. Print. 8 October 2014.