Supply and Demand

In 2006, most Internet users connect to the Internet wirelessly. However, during this time many users are unaware that they're wireless Internet service is being used by nearby users who are able to pick up the wireless signal and access the Internet. Thus, slowing the Internet connection as it is shared between the numbers of users connected to the wireless modem.

This affects the supply and demand of wireless Internet services as the supply is increasing while the demand for more wireless services decreases. Supply refers to the quantity of a product that a producer is willing and able to supply to the market at a given price in a given time period. The basic law of supply is that as the price of a product rises, producers will expand their supply onto the market. Demand is described as a consumer's need to pay a price for goods or service. It refers to the quantity of a product people are willing to buy at a certain price.

From the article, the Broduer residents who pay $40 a month for their internet service are experiencing slow 'rush hour traffic' internet connection due to the additional users who are piggybacking on their unsecured internet connection. This shows that the consumers who are piggybacking from one consumer, is decreasing the demand for wireless Internet service and the keeping the supply in the market staying high. There's little concern about using an open access point, and a lack of security is typically understood to represent implicit approval that it's okay. A college student states that he doesn't think it's stealing and just uses mainly for web surfing, keeping up with emails and doing homework. However, one person's connection to the wireless service can reduce the benefits available to others

Externalities are defined as a cost or benefit that is not transmitted through prices and is gained by a party who was not involved as either a buyer or seller of the goods or services causing the cost or benefit. In this case, externalities can cause slight market failure if the price mechanism does not take into account the full social costs and benefits of the service. As mentioned in the article, this affects people who live in dense and largely populated areas as their wireless Internet services can be used as long as they are 200 feet within range of the wireless router, since the Wi-Fi radio waves can easily be transmitted through walls, ceilings and floors.

Elaine Ball, an Internet subscriber who opens her network and leaves it as an unsecured as a passive protest on exorbitant cost of Internet access. This can be seen as a negative externality as Internet service providing companies can see this as a market failure due to the fact that consumers are not interested in the full cost and benefits of the product.

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