Supply and Demand Simulation
1. What causes the changes in supply and demand in the simulation?
Factors that affect supply and demand in the simulation are driven by the availability of the 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. In the simulation, as the price decreased, demand increased. The supply curve, on the other hand, is upward sloping. The quantity of two-bedroom apartments increased as the price increased. A surplus in the market for the apartments exerts downward pressure on the price. This means to attract the possible renters, GoodLife would need to lower prices. On the other hand, a shortage in the number of available apartments exerts an upward pressure on the price. To maintain the balance of quantity demanded and the quantity supplied, GoodLife would need to raise the prices.
2. How do shifts in supply and demand affect your decision making?
Shifts in supply and demand in the simulation were caused by several factors. Changes in the direction of GoodLife Management and the population changes within Atlantis and outlying areas had an affect on supply and demand in the simulation. Changes in the preference of the tenants caused the demand for the apartments to decrease. GoodLife Management began converting the rental apartments into condominiums that were for sell, causing a decrease in the supply at the same time as the decrease in demand. Because of this, the supply curve and the demand curve both shifted to the left.
3. List four key points from the reading assignments that were emphasized in the simulation.
Four key points in the simulation were supply and demand, equilibrium, shifts in the supply and demand, and price ceilings. The simulation is based on supply and demand and is very helpful in understanding the different factors that can affect it. Equilibrium is when the quantity demanded equals the quantity supplied. The simulation showed if prices were below equilibrium, the quantity of apartments demanded exceeded the quantity available and caused a shortage in the number of available apartments. This affect also causes the price of the rental apartment to increase. If prices were above equilibrium, the opposite would happen. There would be a surplus of available apartments and would drive the price down. Shifts in supply and demand in the simulation were illustrated by different factors causing supply and demand to decrease at the same time.
1.To increase prices according to 4th scenario (total line price increase by 5%) and from short-term revenues income use resources for advertising.
3. I will assess my student’s mastery of this objective by creating an open conversation within the entire class by asking questions, and before each student is dismissed, they will each hand in a piece of paper with one difference and similarity between the two texts written down.
The aim of this paper is to cover how each area of the simulation relates to what we have discussed in the class. We are going to discuss target market, 4p’s of marketing, performance metrics and research data.
We the consumer would rather pay less for any product that is needed or want. Ultimately we are the reason for high prices as well as low prices. Prices of products do not always stay the same and more popular products have higher prices than less popular products. These fluctuations, high prices and low prices are from the idea of supply and demand. Supply and demand defines the effect that the availability of a particular product and the desire or demand for that product has on price. Generally, if there is a low supply and a high demand, the price will be high (Investopedia). To understand the idea of supply and demand, the understanding of supply and the understanding of demand must be defined. The Law of Supply states that at higher prices, producers are willing to offer more products for sale than at lower prices, also that the supply increases as prices increase and decreases as prices decrease (Curriculum Link). The Law of Demand states people will buy more of a product at a lower price than at a higher price, if nothing changes, at a lower price, more people can afford to buy more goods and more of an item more frequently, than they can at a higher price and that at lower prices, people tend to buy some goods as a substitute for others more expensive (Curriculum Link). In todays economics these ideas are seen frequently in everyday life. The laws of supply and demand are seen in many ways in the company Apple Inc. Each year Apple Inc unveils a long awaited mobile operating system and IPhone. We can also see many aspects of the law of supply and demand in Nike Inc’s Jordan Brand. Jordan Brand has released a number of...
Supply is the quantity of goods that sellers are prepared to sell at any given price over a period of time” (ibid). The major factors of demand that affect the housing market are: taste and preferences and income. The major factors of supply that affect the housing market include government policies and price inelasticity of supply (ibid).
The natural gas market, however, is in an upturn as recent figures demonstrate – contracted demand higher gas prices. The relationship between demand and supply, which regulates the market price and quantity, are influenced by various factors (any changes in market other than a change in prices) resulting curves to shift – that is, market price and quantity increases or decreases.
This increase in demand leads to an increase in the cost of rents in the
In contrast, one of the negative impacts of gentrification is the fact that the cost of living is likely to rise. Property prices and rents may go up, pushing tenants out of the areas they had inhabited for years. Those buying houses may evict the inhabitants to move in themselves or rent the houses out to new arrivals who will be willing to pay the high rents being charged. D.W. Gibson notes that residents who own houses may also decide to take advantage of the rising property prices, sell their houses, and move out (Gibson). The culture and character of a town will slowly be transformed and lost
In Book V of his Principles Alfred Marshall describes what he denominated “the state of arts” of the supply and demand theory, going back to Adam Smith. The assumptions then applied to the matter was that 1) demand comes first, 2) it is up to sellers to adjust supply to demand through production and marketing, a mix where the price is the most important variable, and 3) production takes time. Marshall summarized statement 2 later on into a single phrase: “Production and marketing are parts of the single process of adjustment of supply to demand” (MARSHALL, 1919, p. 181). This set of three assumptions suggests that the basic principles of the supply and demand theory collected by Marshall from the work by some scientists were then laid, requiring therefore only the right mathematical treatment.
Discuss this statement and show how your critical understanding of the text has been strengthened by at least two different readings.
As shown above, crisis increases demand for the product leading to a shortage. Supply does not change. Equilibrium price now shifts to the right and increases. The market is now ready and willing to pay for the product or service at a higher price. Upon seeing long of people waiting for the product, sellers either hike the price or bring in more supplies if it were possible. If more suppliers are brought, equilibrium price goes back to normal. If supply cannot be increased, sellers increase the price of the product or service.
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.
And although, as stated above, the real estate market can me volatile; the real estate market is constantly finding its self at the center of rapid economic and social change, which is transforming the built environment (Kees et al., 2014). Through this knowledge, we see that the market goes through cycles that can be analyzed and predicted to help see trends more clearly. Over all, the real estate market, wither we are referring to the local, national or global market; will continue change through time and in relation to surrounding markets and other internal or external
As the supply curve moves in the automobile industry, the equilibrium price and quantity sold will change with this shift. When the automobile manufacturers see this shift in supply, they will then raise their prices and the quantity sold will fall. Car manufacturers will also develop...
The second market structure is a monopolistic competition. The conditions of this market are similar as for perfect competition except the product is not homogenous it is differentiated; thus having control over its price. (Nellis and Parker, 1997). There are many firms and freedom of entry into the industry, firms are price makers and are faced with a downward sloping demand curve as well as profit maximizers. Examples include; restaurant businesses, hotels and pubs, specialist retailing (builders) and consumer services (Sloman, 2013).