Supply and Demand Simulation

In: Business and Management

Submitted By candrea2214
Words 550
Pages 3
Supply and Demand Simulation
Andrea Nelson
ECO/365
May 12. 2014
Vilma Vallillee

Supply and demand simulation
From the University of Phoenix supply and demand simulation I identified a few microeconomic and macroeconomic principles. Monopoly and Maximizing revenue are two microeconomic concepts. Colander (2010) explains that microeconomics is “the study of individual choice, and how that choice is influenced by economic factors (p. 15)”. Economic factors and the market influence both of them. Macroeconomics, on the other hand, is “the study of the economy as a whole (p. 15)”. Equilibrium and supply and demand models fit in this category because they are affected by many different factors, but can only be understood as a whole.
During the simulation, a shift on the demand occurs when a new company opened its doors in town. This brought more people to move to Atlantis and cause the demand curve to move to the right as an increase in the demand of apartments occur. The simulation explains that the demand curve is an imaginary line at a point in time that tells the quantity demanded at various prices. This curve has a downward slope because at a lower price, more quantity of a product is demanded.
Before the shift of the demand occurs, the equilibrium on the demand and supply is 2100 apartments at a rental rate of $1150. When the shift of the demand occurs, a temporary shortage of apartments occurs, exerting an upward pressure on the price along the supply curve. As the rental rate increases, the quantity demanded and supplied increases, reducing the shortage. When this happens the new equilibrium at $1400 and 2350 apartments leased.
A case during the simulation where a shift of the supply occurs is when GoodLife converts some apartments into detached condos for sale instead of for lease. A change in the consumers preference causes the demand for apartments…...

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