Supply and Demand Simulation
Supply and demand plays an intricate role in the amount, price, and availability of products and services. The applying supply and demand concepts simulation guides users through making decisions for Goodlife, a management company for 2 bedroom apartments in Atlantis. The simulation names the user the property manager; responsible for vacation residents, new pricing for units, and advertising. The property manager makes decisions in circumstances including the changing of supply cure, demand curve, microeconomics, macroeconomics, and the equilibrium of price and quantity. All of these decisions move the business along as conditions change around it.
Demand Curve Shift
Lintech Expansion
The demand curve follows a distinct line unless some other factor causes the line to shift. The demand curve operates under the principle if the demand goes up the price goes down, and likewise if the demand goes down the price goes up as long as all other things are constant. A shift in the demand curve indicates something is not constant. In the simulation, a company named Lintech expanded its operations to Atlantis. The expansion increased the population of Atlantis changes the demand for apartments, but does not change the supply of apartments in the area. The sudden shortage of apartments created a demand curve shift. The shift permits Goodlife to offer a higher price for their 2 bedroom apartments, and still be able to fill the same number of units. By increasing the price, Goodlife brought the price and quantity available back into equilibrium (University of Phoenix, 2014).
Detached Homes
A few years later, the market shifted and people became more interested in detached homes than apartment homes. Once again, Go...
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.... Supply and demand are not a constant, but an ever-changing model. As the supply and demand curves changed and shifted, Goodlife adapted prices and quantity to match. This scenario is easily adapted to many different aspects of supply and demand. Prices are constantly changing on the products, services bought every day, and supply and demand drove those prices.
References
McGaughey, C. (2004, July 12). Price elasticity: From tires to toothpicks. Retrieved from http://www.econedlink.org/lessons/index.php?lid=551&type=educator
Saylor. (2014). Principles of microeconomics. Retrieved from http://www.saylor.org/site/textbooks/Principles%20of%20Microeconomics.pdf
University of Phoenix. (2014). Applying supply and demand concepts simulation. Retrieved from https://ecampus.phoenix.edu/secure/aapd/vendors/tata/UBAMsims/economics1/economics1_supply_demand_simulation.html
In economics, particularly microeconomics, demand and supply are defined as, “an economic model of price determination in a market” (Ronald 2010). The price of petrol in Australia is rising, but the demand remains the same, due to the fact that fuel is a necessity. As price rises to higher levels, demand would continue to increase, even if the supply may fall. Singapore is identified as a primary supplier ...
The following paper analyzes the initial release of Microsoft's XBOX 360 gaming system release into the United States and the changes that occurred with the supply, demand and pricing of the product in the months following its release. The social science of economics tells us that supply, demand and price are closely related to one another and have a significant on how much of a particular good is purchased and the rate at which it is purchased by consumers. The XBOX 360 phenomenon is a solid example of the impact that changes in supply, demand and price have on the marketplace and the rate at which goods are purchased.
In a social sense, consumers prefer low-density developments. Low density means more space and better standard of living. There are apartments available in every city for those who prefer them. However, many people choose to live in detached homes. Nobody forces people to buy house at outer suburbs (Holcombe 1999). Developers build those houses because that is where people want to live. Why? The answer is simple, those houses offer better space and comfort compare to living in the confine inner city. Many have suggeste...
Week two we had to discuss how the equilibration process is identified in the supply or demand. Business managers need to understand how market equilibrium is sought to follow changes between economic principles, specifically supply, market, and on how business can determine in everyday decisions. This paper is sought to analyze with support ideas that are consider towards the law of demand, and the law of supply it will acknowledge the efficient market theory in which it will explain surplus and shortage.
Demand can also be 'inelastic'. By inelastic demand we mean that that demand remain constant irrespective of change in price (refer graph below).
“If, however, changes occurred in the other determinants of demand, we would expect to have a shift in the entire demand curve” (McGuigan, Moyer, and Harris, 2014). Some of the changes that would cause the demand curve to shift right would be increase in the purchaser’s income, decrease in price of the competitor’s product, a wave of consumers looking to switch from high-calorie food to low-calorie food could also shift the demand curve. For the demand curve to shift left factors such as an increase in price of our competitor, a decrease in our customer’s income, or a third competitor entering our
Another word for this is equilibrium, which is the “state in which opposing forces or influences are balanced” (). By shifting the supply curve, it can adjust the equilibrium price by changing its price and quantity. A shift of a supply curve works the same way as the shift of a demand curve. By referring back to Tim’s life, his supply of labor allows him to receive his income he needed in order to make demands for his desire – or his woman’s desire. When a woman has an expensive taste, it will affect Tim’s supply curve because he will not be able to afford songwriters, singers, and bands. This causes the supply curve to shift to the left resulting an increase in price of Tim’s music and a decrease in quantity of his music. If the supply curve continues to shift to the left, eventually Tim will go out of business, and his girlfriend will ditch him because he can no longer keep up with her wishes. So far, everything is going downhill and the opportunity cost Tim made was not worth because it affected his career and his life. However, if Tim decided to his focus on his career rather than his wife, then the supply curve will shift to the right. This depends on the opportunity cost as well as if he is willing to spend less money on his wife and more towards his profession. By having a right shift of
Microeconomics have and equality of importance when it comes to the equilibrium prices and quantities. One of the importance of the simulation video was the change in demand and supply when it came to the rental price. Firstly let's examine two examples of microeconomics concepts law of supply and demand. So these laws show how people behave and how we allocate our resources. For the law of supply, the higher
The law of demand states that if everything remains constant (ceteris paribus) when the price is high the lower the quantity demanded. A demand curve displays quantity demanded as the independent variable (the x-axis) and the price as the dependent variable (the y-axis). http://www.netmba.com/econ/micro/demand/curve/
The economic theory of supply and demand dictates that an excess of supply (hotels) to demand (customers) leads to a lower price consumers are willing to pay. This creates inelasticity within hotel pricing and places substantial pressure on management to meet the pricing needs of customers while providing an attractive and unique service. Hotel services are also intangible in nature, placing increased burden on hotel owners to utilise all available rooms through discounts and deals.
A change in quantity supplied is just a movement from one point to another in the supply curve. In opposite, the cause of a change in supply is a change in one the determinants of supply that shifts the curve either to the left or the right. These determinants are the resource prices, technology, taxes and subsidies, producer expectations, and number of sellers. An equilibrium price is required to produce an equilibrium quantity and a price below that amount is referred as quantity supplied of zero no firms that are entering that particular business. If the coefficient of price is greater than zero, as the price of the output goes up, firms wants to produce more of that output. As the price of the output goes up it becomes more appealing for the firms to shift resources into the production of that output. Therefore, the slope of a supply curve is the change in price divided by the change in quantity. The constant in this equation is something less (negative number always) than zero because it requires strictly a positive...
Supply and demand is one of the most simple-looking aspects of an economy and its study, but yet it presents the greatest challenge to analysts. Although most events can be mathematically calculated to perfection, the human aspect always intervenes and throws off a calculation. Dealing with the imperfections of psychology differentiates a modern analyst with initiative over one who follows an equation.
The market price of a good is determined by both the supply and demand for it. In the world today supply and demand is perhaps one of the most fundamental principles that exists for economics and the backbone of a market economy. Supply is represented by how much the market can offer. The quantity supplied refers to the amount of a certain good that producers are willing to supply for a certain demand price. What determines this interconnection is how much of a good or service is supplied to the market or otherwise known as the supply relationship or supply schedule which is graphically represented by the supply curve. In demand the schedule is depicted graphically as the demand curve which represents the amount of goods that buyers are willing and able to purchase at various prices, assuming all other non-price factors remain the same. The demand curve is almost always represented as downwards-sloping, meaning that as price decreases, consumers will buy more of the good. Just as the supply curves reflect marginal cost curves, demand curves can be described as marginal utility curves. The main determinants of individual demand are the price of the good, level of income, personal tastes, the population, government policies, the price of substitute goods, and the price of complementary goods.
Shift in supply of housing is affected by cost of using land, labor, building materials and other inputs like electricity (Pascal 1967). Price of existing houses and the technology of production also affect new supply here (Pascal 1967).
When the price of raw material will go up or down, the production coats will rise or fall. Secondly, the price of substitute products also affect the supply curve. Because the relatived products are competitive relationship, when the price of one product goes up, another will goes down. It will affect suppy. Thirdly, production technology will affect the supply curve. When the level of technology is rising or falling , the production costs will go down or up. finally, the government policies will affect the supply curve. Positive policies will make the supply go up, conversely, it will go down. For example, the govenrment limit the amount of cars which people can buy, it will caused the supply curve down. In addition, the price of product in the future and the development of product company will also affect the supply