Supply and Demand Simulation
The Supply and Demand Simulation is about the rental of two- bedroom apartments that is managed by Goodlife Management Company. The Goodlife Management Company is in the City of Atlantis. The Simulation will show the different scenarios in how the shift in demand and supply curve, demand and supply shift, price ceilings, and the equilibrium changes, also the decrease and increase, and how supplies changes can stay the same.
This assignment asks to identify two microeconomics and two macroeconomics principles or concepts from the simulation. Before one can identify he or she needs to know the definition of microeconomics and macroeconomics. As stated by (Colander, 2010) Microeconomics is the study of individual choice and how that choice is influenced by economics forces. Macroeconomics is the study of the economy as state by (Colander, 2010). Scenario one and four identify microeconomics concepts.
In scenario one it describes the Goodlife management company, which manages two- bed room apartment’s has a large amount of vacancy, to have less vacancy the Goodlife management company would need to lower the rate on the rental property from 28% to 15%. By reducing the rental rate quantity is but a lower rate with other things remain constant. The Goodlife Company will have more apartments, which are not at a demanded. 2 The rental company continues to have surplus of apartment but to rent them the rental rate would have to be reduced. In the fourth scenario it explains that Lintech has move to Atlantis, which increase the city of
Atlantis population. The increase demand for apartments have increased, this will increase the rate of rent. Because the rental is higher, but this is a demand and supply increase, and the 2,350 apartment would have been rented for the price of $1,400. Macroeconomics is identified in scenario three and seven. In scenario three a statistics was provided by the Atlantis housing survey on the demand for two- bedroom apartments in the city of Atlantis. It states that so many apartments will be demanded, but survey shows an imbalance between quantity demanded and quantity supplied at the price of renting a two-bedroom apartment.
Because of high rent folk that works in Atlantis lives in neighboring towns because of the low rent. For there not to be a balance between quantity demanded and quantity supplied the rental rate have to decrease. When the scale is balanced, it show equilibrium has been meet. When the rental rate is below the equilibrium this causes for the quantity demanded is larger than the quantity supplied, this leads to a shortage of apartment in the market. Scenario seven states that the government imposed a price ceiling on rental property in the last two years that cannot exceed $1500. 3
The imposing of the price ceiling in this scenario is below equilibrium as in this case, it makes the quantity supply less than the quantity demand. As stated in the (ecampus. phoenix. edu) prices ceiling can have both economic and social consequences. In scenario two the shift of supply curve is upward sloping, and in scenario four the demand curve shifts to the left. In scenario two where the supply curve is upward sloping this was caused from an increase in rental rate. In scenario four the cause of the shift in the demand curve is caused from more people demanding apartments.
In the shift of supply curve it would not affect the equilibrium price, as stated in the (ecampus. phoenix. edu) the supply curve for products are imaginary line at a point, which tells you the quantities, and the decision maker cannot access the supply curve. In the shift of the demand curve means that the quantity demanded is more than the quantity supplied at the original equilibrium, and the decision maker would increase the quantity demand. In the workplace I would apply it to access as to what student are accomplishing according to mastery, partial mastery, or non- mastery, and his would help all person who are assisting the students to know what his or her needs are. Price elasticity of demands affected consumers as related to the simulation is the increased and decreasing prices of the rental property. Folk that worked in the city of Atlantis lived in neighboring city because of the high priced two-bedroom apartments.
References
- Economics for Business, University of Phoenix, https://ecampus.phoenix.edu Colander, D. C. (2010). Economics (8th ed. ). New York, NY: McGraw-Hill
