...Supply and Demand Simulation Thomas Alejandro ECO/365 February 17, 2014 Mubarak Laminu Supply and Demand Simulation The supply and demand simulation is based on the management of rental apartments by GoodLife Management in the fictional town of Atlantis. Atlantis is a small city with open spaces, low population, and a low crime rate. There are plenty of sidewalks and street systems for easy access to the highway. The housing in Atlantis is detached homes and apartments. At the beginning of the simulation GoodLife had 2,000 two-bedroom rental apartments and is required to decrease the monthly vacancy from 28% to at least 15% to increase revenue. GoodLife has to find what rental rate to input so all expenses are covered. There are many changes to the simulation that affect supply and demand. There are also shifts in the supply and demand that affect the decisions made by GoodLife. Four key points emphasized in the simulation are; supply and demand, equilibrium, shifts in the supply and demand, and price ceilings. The concepts in the simulation can be related to the workplace of the author of this paper. Factors that affect supply and demand in the simulation are driven by the number of available two-bedroom rental apartments, the demand for the rentals, the number of available renters, and the price. According to the simulation, a demand curve is downward sloping, and as the price decreases, demand increases. The supply curve is the opposite of the demand curve...
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...Supply and Demand Simulation This paper discusses the Applying Supply and Demand Concepts simulation from the student website. First, it seeks to identify two microeconomic principles and two macroeconomic concepts presented in the simulation with explanations why they are categorized as macro or microeconomic. It also identifies one shift of the supply curve and one shift of the demand curve and the shifts’ cause. Additionally, impact on equilibrium price, decision making, and quantity are analyzed. Different ways are referred in which concepts about supply and demand can be applied in a real life/ workplace situation. Ways are shown in which concepts of micro and macroeconomics assist in understanding factors influencing movements in supply and demand, on the equilibrium price, and quantity. Finally, it explains the way in which price elasticity of demand has an impact on consumer’s purchasing, and on the pricing strategy of the company. Two microeconomic principles from the simulation are demand and supply. “The demand curve is downward sloping, and that quantity demanded increases as the price decreases, as you move down the demand curve” (University of Phoenix, n.d.). In the University of Phoenix simulation (n.d.), Good Life could increase the quantity demanded of its rented apartments only by reducing the rental rate. “The supply curve is upward sloping, and the quantity supplied increases with an increase in price, as you move up the supply curve” (University...
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...available units was no easy task for Good Life management and likely would not have been achieved with a solid understand of the principles of the micro and macroeconomics and the supply and demand curve. This simulation has taught the importance of economics and how the play an important part of everyday life. Micro and macroeconomics play a key role in the everyday lives of people and corporations. In the simulation in this weeks assignment Atlantis is a prime example of just how often people come into contact with situations with two important factors of economics. The two important factors are supply and demand and they affect everything that we as people do in everyday life. Understanding supply and demands makes consumers, the supplier and us, determine when it is best to buy and best to sell. Understand this principle enables us to make more informed purchasing and selling decisions. There are a number of real world examples of how micro and macroeconomic principles appear in this weeks assignment simulation, but mostly macroeconomics come into play because it is in the perspective of the business franchise, Good Life Management. Supply and demand are two microeconomic principles that appear in the simulation and in regard to the rental apartments in Atlantis, supply and demand is what is used to find balance in the rental housing...
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...Supply and Demand Simulation ECO/365 November 11, 2013 Supply and Demand Simulation Microeconomic and Macro Principles As per the simulation, the two major principles of microeconomics are demand and supply. The simulation focused majorly on the demand and supply of rental properties. The simulation clearly states that the macroeconomic factors are changes in the population trend. One of the factors that would directly influence these changes is choosing either to buy or rent apartments. Colander (2010), says, with falling prices it increases the quantity demanded and the supplied quantity reduces when the market prices recede (Colander, 2004). Supply and Demand Shifts From the simulation, the common factors of demand and supply are the availability of apartments, demand, potential renters and pricing. The simulation shows that the demand curve has a downward slope which make prices rise and decrease demand and vice versa. On the flip side of that is, supply has a downward slope curve and the number of apartments rises with price rises as well. In addition, larger numbers of apartments applies pressure on prices which leads to prices falling and for the complex to have a larger number of renters so they need to lower the price on apartments. The opposite would be, fewer number of apartments results in an climbing pressure on prices to obtain a larger market share and keep equilibrium which would enforce the firm to increase prices. Supply and Demand Shift Effects ...
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...Supply and Demand Simulation The simulation focus was on the supply and demand aspects of rental units managed by GoodLife Management Company for duration of a nine year period within Atlantis. As a property management company, the duties include advertisement, receiving notices on upcoming vacancies, and establishing rental rates. Within the nine year period, there were many obstacles the management company faced which caused them to analyze the situation to make the best decisions. Some of the changes were increase in supply and demand, the curve in supply and demand, equilibrium, and price ceilings. The concept of microeconomics and macroeconomics used in the simulation are demand and supply, equilibrium, shifts in demand and supply, and price ceilings. Supply and demand are pivotal in understanding situations in businesses today. Supply as related to this simulation refers to the amount of rental apartments or condominiums GoodLife was able to lease or sale. Demand refers to the amount of properties leased or sold. The higher the price to rent properties, the lower the demand would be for those properties. As seen in one of the simulations, when there was a decrease in the monthly rent, it increased the demand. The simulation shift in the demand curve started after Atlantis surveyed the area and discovered that more people were interested in detached homes rather than two-bedroom apartments. This resulted in a decrease in demand but the supply remained the same....
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...Supply and Demand Simulation Name University Supply and Demand Simulation The supply and demand simulation is based on an apartment management company which is located in Atlantis and how various economic factors impact it. The supply and demand concept is very important and critical in microeconomics as well as macroeconomics. The microeconomics concept is classified within the changes of the equilibrium and the supply and demand concept in which the apartment community operates within. While in the macroeconomics concept it is classified as price ceilings and elasticity, which shows that there is a large impact on the overall apartment market locally. The supply curve and demand curve showed that there could be a significant change within the economic environment if there were to be any changes within them. Examples of what any shift or change to the supply curve and demand curve have very different results depending on the shift. If the supply curve shifted to the right, it would result in an increase in apartments available for renting. If the apartment management company could accomplish this by expanding the apartment buildings to allow for more units to be occupied. If the demand curve shifted to the left this would indicate a decrease in the demand of its consumers and result in fewer apartments being occupied. The management company faced this in the simulation and caused for them to lower the prices to compensate for the widespread desire for property ownership...
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...Supply and Demand Simulation Stephanie Barnett Week 2 Individual Assignment ECO/365 Instructor Monday, December 02, 2013 Supply and Demand Simulation The simulation was extremely informative, effective, and a valuable learning experience. I feel it has enabled me to evaluate management options and connect through visual stimuli. The scenarios presented real-world situations and decisions and dealt with quantity demanded, quantity supplied, demand curves, supply curves, equilibrium prices, and the factors that affect them all. I also found the price ceiling scenario most interesting and familiar as many apartments where I live are city or government mandated. Most of the concepts in this simulation were relative to microeconomics, the theories, practices, and management in an organization. However, the government mandated price ceiling reflects macroeconomic theories, practices, and management of a states, regions, or countries. Scenario I In the first scenario the objective was to decrease the vacancy rate while maximizing profits. My decision to decrease the vacancy rate to 5 percent by reducing the rental rate to $950 enabled GoodLife to increase occupancy/demand on their two-bedroom apartments; fully maximizing their profits. My decision would also leave GoodLife with a surplus of product/apartments, which is not so good in regards to maximizing profits. In order to rent these surplus of apartments GoodLife...
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...Supply and Demand Simulation Leon James O'Connell ECO 365 August 27, 2014 David Disciascio Supply and Demand Simulation The simulation showed examples of supply and demand based on managing rental apartments. The simulation showed increases and decreases that effect supply and demand by using rental scenarios. A decrease in the rental prices caused the demand to increase for two bedroom apartments. The demand of single family homes was decreased by an increase in two-bedroom apartments. Fewer houses were supplied with lower rent and more houses were supplied at higher prices. The simulation is a learning tool to see how supply, demand and the equilibrium affect the rentals. The simulation helped students in determining rental rates, vacant apartments, and the quantity of apartments that are rented for any given month. According to the text, macroeconomics is the study of the economy in its entirety. Macroeconomics is studying unemployment, business cycles, business growth, and inflation. Microeconomics refers to studies of individuals and decisions made in business. An effect of a microeconomic result would be a higher demand for maintaining the rented properties by an increase in rented apartments and employment would increase. If Goodlife wanted to reduce the vacancy rate, lowering prices of two bedroom apartments would increase demand of the apartments. Prices of the two bedroom apartments will rise as the demand for a two bedroom apartment increases. This equates...
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...Supply and Demand Simulation “Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy.” (Heakal, 2015). Businesses today need to pay close attention to the market and the supply and demand curves to stay ahead of their competition. By watching the prices of goods and services a business can attain profits and know how to lay out their business goals. The simulation of the Good Life Management Company is a property management firm that has seven apartment complexes in the city of Atlantis. Atlantis is a well maintained city that has the picture perfect area similar to Mayberry. It has nice parks, living areas, and low crime rates. The Good Life Management Company is the only property management firm in Atlantis and has over 2,000 two-bedroom apartments and a 28% vacancy rate. They use the supply and demand curve to determine the equilibrium in the market and continue to watch the movement as the curves shift and move. Some of the microeconomic principles that the simulation showed, included supply and demand. To maximize revenue for the Good Life management company the plan was to decrease the rent amount in order to lower the percentage of vacancy to 15%. A different company arrived in town called Lintech which increased population and jobs. This in turn, made the demand for housing rise and less vacancy as well as more lease renewals. Some of the macroeconomics involved with the simulation was the...
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...A simulation was completed to provide examples of how the supply and demand curves can have an affect on the decision making process for a company. During the simulation, different factors were taken into account and the user was to make decisions based on supply and demand and then were given the outcome of their choices. The information within this paper will summarize the comprehension of the material given in the simulation and will relate it to real-life examples. Micro and Macro Principles During the simulation, the two microeconomic principles or concepts present were the supply of apartments that GoodLife offered and the demand for the apartments by the consumers. Both concepts focused on a closer level to the supplier and consumer, which is why it can be defined as a microeconomic concept. Each concept focuses on the affect that an increase or a decrease in demand for or supply of two-bedroom apartments can have on the local economy as well as the company. These concepts also provide help during the decision making process because the company can apply the supply and demand statistics in order to maximize the revenue for the company. Two macroeconomic concepts spotted were the boost in the Atlantis population and economy, and the new price ceiling enforced. Both concepts have an affect on the overall economy, the larger scale (macro), which will alter the statistics that are used to generate economic policies that affect the aggregate economy. The increase in population...
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...Supply and Demand Simulation The simulation shows over the years, there are several changes to the population of Atlantis and thus the supply and demand of two-bedroom apartment housing. The changes in the supply and demand curves cause the equilibrium price to rise and fall. In the simulation, the price elasticity of demand affects both the customer’s decision to rent and the company’s pricing strategy. The principles of microeconomics and macroeconomics are both active in the simulation. Examples of microeconomics are the individuals and the GoodLife Company as they made choices because of scarcity and regulation. An example of macroeconomics is the economy-wide change of the government that places a price ceiling on apartments for GoodLife. The two examples of microeconomics classify as such because they have a limited effect on the organization or the individual in the economy. The government’s regulation of price ceiling classifies as macroeconomics because it has an aggregative effect on the economy. Individual consumer choice causes increases and decreases in demand that the company can respond to. The company can modify its price to achieve equilibrium in reaction to consumer demand. However, this is not the case when government sets regulation on product price. In the beginning of the simulation, when the company lowers its rate to $1,050 per month, the vacancy rate hits target level. At this price strategy, the company can fill vacancies for 1700 apartments, leading...
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...Supply and Demand Simulation ECO365 August 7, 2013 Michael Gay Supply and demand can change drastically in a matter of seconds. One day you may be selling mountains of product, while the next day you could be sitting on an overwhelming amount of surplus of that product. In the supply and demand simulation I came across a couple of concepts that were related to microeconomics and macroeconomics. Equilibrium, shortage, price ceiling, and shift in demand are all concepts that are related to micro and macroeconomics. Shift in demand and shortage are both terms that are related to micro economics because they deal with specific situations while equilibrium and price ceiling would be considered macroeconomic because they can be used to describe many different situations and fit in many different scenarios. In the simulation there was a shift in the supply curve when GoodLife decided to make more apartment units available for rent. This caused the supply curve to shift to the right with the increase of apartments. With the shift of the supply curve to show an increase in apartments available for rent, there was also a shift in the demand curve. The demand curve shifted down because with more apartments available, there was less of a demand for apartments. Changes in supply and demand are what cause the shifts in the supply and demand curves. When there is an increase in demand it causes the equilibrium price to rise because more people would be willing to pay more for...
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...Supply and Demand Simulation Paul C. Hostman ECO 365 February 2, 2015 Dr. Jong Yi Supply and Demand Simulation Objective The Supply and demand simulation is designed to apply real world business concepts to gain a better understanding of how a company analyzes supply and demand to optimize decision making. The simulation sample industry of rental property management can be used as a learning tool to identify the causes that change aggregate supply (AS) and aggregate demand (AD) and the shifts in supply and demand that impact surplus, shortages, and revenue. The primary goals are to maximize revenue and reduce vacancies through cause analysis followed by adjusting rental rates accordingly to compensate for shifts in the market (TATA, n.d.). Changes in AS/AD The aggregate supply (AS) is the economy’s gross production of goods and services to meet the total aggregate demand (AD), or the demand for final goods and services during a specific period. Economic changes frequently occur and determine whether to increase or decrease rental rates during a short-run cycle. For instance, a population increase will increase demand therefore presenting an opportunity to increase rental rates. Consequently, changes in preferences toward purchasing homes versus renting will decrease the demand. As identified in the simulation, the equilibrium will also change as the AD curve shifts. Rental price adjustments are then necessary to eliminate any potential surplus or shortage unless feasible...
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...Supply and Demand Simulation Justin Valence ECO 365 Mar 18, 2013 Roger Hinds Supply and Demand Simulation Microeconomics affect everyday lives in ways we do not necessarily see. Take for example the supply and demand simulation. This simulation was a good way to determine first hand how certain circumstances change the supply and demand and how it affects prices of two-bedroom apartments. Circumstances such as inflation, unemployment, and the ability to produce more product or outcome are all aspects of macroeconomics that economists look at to determine or recommend changes to ensure a healthy economy. On the other hand, microeconomics economists study more the supply and demand of a market by studying the habits of the consumer. During the supply and demand simulation, I found a couple different scenarios where there were changes to the supply curves and demand curves. One example of a change to the supply curve was when “Susan” agrees to convert more apartments into condominiums for sale. This would decrease the number of apartments for rent or a decrease in the supply of apartments. Granted, an overall shift from renting to owning would lessen the liability of GoodLife but also decreases the supply of apartments available for the demand should one arise. Like the change to the supply curve, a change to the demand curve is also visible within the simulation. In the same scenario of “Susan” converting apartments for rent to condominiums for sale, the reason...
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...In the simulation of the city of Atlantis, it demonstrated how supply and demand can shift due to adjustments with prices. The simulation focused on two-bedroom rental properties. We received the expertise of Hal Morgan and Susan Hearst from Good Life Property Management to determine rental prices and how to balance out the supply and demand. Through the simulation, I was able to see that when the rental price of the apartments decreased, there would be an increase in the demand for the apartments. Furthermore, if the price of the apartments increased, then there would be a decrease in the demand. However, to balance out the supply and demand, there needed to be a shift in either the supply or demand. Throughout the simulation there were a few concepts that dealt with macroeconomics as well as microeconomics. As learned from a previous course, macroeconomics examines nation-level economic facts like GDP, unemployment, foreign trade, and so on. Colander (2010) defines it as the study of the economy as a whole. It considers the problems of inflation, unemployment, business cycles, and growth (p.15). However, microeconomics deals with individuals, families, and companies. Colander defines it has the study of how individual choice is influenced by economic forces (Colander, p.15). One concept in the simulation that dealt with macroeconomics was when there was a price ceiling enforced. As explained by Colander, a price ceiling is a governmental-imposed limit on high a price can...
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