Supply and Demand Simulation
The supply and demand simulation included both microeconomics and macroeconomics concepts. The simulation focused on a property management firm, GoodLife Management, and its ability to adjust the levels of supply and demand of two-bedroom apartments in the Atlantis community. GoodLife Management was challenged with changes in population, tastes, income, and a price ceiling. As a result of these factors the firm had to strategize about shifts in the changes in supply and demand and determine the equilibrium price and quantity.
The microeconomic principles from the simulation include the supply and demand of two-bedroom apartments and the affects of price. The simulation provided exercises on how to determine the number of apartments supplied, the population that demanded the apartments, and the appropriate price per unit at a given time considering market conditions. Microeconomics looks at the smaller picture and focuses on how individuals and firms make decisions based on economic forces. GoodLife Management had to consider how many apartments to supply and the price levels to charge for them to maximize profit (University of Phoenix, 2011, Week Two Simulation).
Macroeconomics views the aggregate economy in terms of unemployment, growth, business cycles, and inflation. In the simulation, two macroeconomic concepts considered are the population growth in Atlantis and business cycles. GoodLife Management considered if it should increase the number of two-bedroom apartments based on what the expected demand would be for the units given the economic climate. When the population increased in Atlantis, growth in apartment housing was expected. However, depending on the housing trends at ...
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...nomics and macroeconomics concepts interacted with one another throughout the simulation as GoodLife Management adapted strategies to changing levels of supply and demand. The company experienced shifts both in the demand and supply curves, causing it to reevaluate prices, the supply offered, and number of units demanded during different periods. As a result, the company identified equilibrium price and quantity, recognized price elasticity, and integrated economic principles to balance supply and demand as it considered economic expectations and growth opportunities.
University of Phoenix. (2011). Week Two reading. Retrieved from University of Phoenix,
ECO/365 – Principles of Microeconomics course website.
University of Phoenix. (2011). Week Two simulation. Retrieved from University of Phoenix,
ECO/365 – Principles of Microeconomics course website.
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