Supply and Demand Simulation
analytical Essay
1008 words
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 this essay, the author
- Describes how the applying supply and demand concepts simulation guides users through making decisions for goodlife, a management company for 2 bedroom apartments in atlantis.
- Explains that the demand curve follows a distinct line unless some other factor causes the line to shift.
- Analyzes how the demand curve shift triggers goodlife to reduce rental rates to maintain occupancy in their apartments.
- Explains that the supply curve follows a similar concept as the demand curve. goodlife decided to convert some of their apartment homes to condominiums in response to growing interest in detached homes.
- Analyzes how the city of atlantis imposes rent control to assist middle-income families in finding affordable housing. goodlife reduces their supply of apartment homes to match the cost of operations.
- Explains that microeconomics is the smaller events on an individual level. lintech expanding its operations to atlantis caused a change on the demand curve by increasing the number of potential renters.
- Explains that macroeconomics is larger events on societal level, such as the massive increase in the technological industry in atlantis. the large increases in population drove the city to implement rent control.
- Describes how the large influx of amazon.com employees caused a demand shift, and prices for each unit had risen substantially.
- Analyzes how goodlife's strategy was to match the price and quantity available with what the consumer is willing to pay.
- Explains that goodlife, like many companies, strove to match and change with the market. supply and demand are not a constant, but an ever-changing model.
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