The decrease in demand causes the demand curve to shift down. When a significant change in price occurred, it caused a noticeable change to demand. Since demand is greater than the supply of apartments, rental rates are increased.
This illustrates that the supply curve has an upward slope.
Through this simulation, I was able to understand the affect of price ceilings. It also eventually occurred and as a result, this factor caused the supply curve to shift to the left or decrease because there was not only a decrease in the demand for the two-bedroom but also a decrease in the supply.
Consequently, there was an excess demand, creating a supply shortage. On a macroeconomic scale, it would not hold true because of the fact that there are numerous rental management organizations throughout the world. The equilibrium rental rate was then higher than before, but the equilibrium quantity was less.
As a result, GoodLife needed to lower rental rates to attract more renters. References University of Phoenix. As stated in Macroeconomics: This resulted in an increase in demand but the supply remained the same. The fifth scenario provided a situation in which the housing preference changed from the two-bedroom apartments supplied by Goodlife to detached homes provided by a competitor.
Having a broad understanding of economic concepts can help me in my career in several ways. The simulation this week provided realistic examples to the economic theories we have studied thus far and has increased my understanding of the practical application of economics.
The decrease in demand of apartments created a surplus of apartments at the original rental rate. As the rental rate is lowered, revenue first increases, reached a maximum at a particular rate and quantity demanded, and decreases. Throughout the simulation, the company had to react quickly to many opportunities and changes in the economic climate to ensure the highest possible price could be obtained on available apartments.
In the next situation there was continued decrease in the demand for two-bedroom apratments due to preference. The second macroeconomic principle from the simulation was the supply curve demonstration. This is a microeconomic challenge that businesses at all levels must face.
The objective of the first simulation was to determine the monthly rental rate for two-bedroom apartments on temporary leases. However, if there are very few substitutes available, consumers will pay a premium for the product at many price points, resulting in low price elasticity.
For any supplier, production costs normally increase for each additional unit of the product. As the rental rate of the apartments was decreased, demand increased, resulting in a lower vacancy rate.
In order to bring equilibrium to the supply and demand of apartments the property manager must lower the monthly rental rate in an attempt to decrease the surplus of available apartments.
A macroeconomic principle that showed through in the simulation was that for any product, more quantity is demanded at a lower price, other things remaining constant.
The key is to determine at what level the rental rate offers the highest possible revenue with a low vacancy rate.
Price ceilings, which put a cap on the amount of rent that can be billed, create a situation that prevents the management company from obtaining the highest price possible if there was sufficient demand for their apartments. There was then a greater decrease in supply than the decrease in demand, and a shortage of apartments occured.
As rates are increased, demand decreased and the supply increased. The new equilibrium price is now higher than before and the number of apartments demanded and supplied increases.
I considered it to be a microeconomic principle in that it was limited to a certain region.Supply and Demand Simulation Summary University of Phoenix ECO, Economics for Business I The Supply/Demand simulation involves acting as property manager for GoodLife Management in the fictional town of Atlantis.
GoodLife Management manages seven apartment complexes in Atlantis. The property manager is expected to adjust. Supply Chain Simulation Essay; Supply Chain Simulation Essay.
Words Oct 22nd, 5 Pages. The Market Essay Supply And Demand Simulation Words | 6 Pages. Supply and Demand Simulation Summary University of Phoenix ECO, Economics for Business I The Supply/Demand simulation involves acting as.
Eco Supply and Demand Simulation Paper Supply and Demand Simulation ECO/ Supply and Demand Simulation In the University of Phoenix simulation (), students are taken through the supply and demand of two-bedroom apartments in a city called Atlantis.
The Supply and Demand simulation involves acting as Property Manager for GoodLife Management, a property management firm that manages apartment complexes in Atlantis.
This simulation was an exercise in applying the supply and demand concepts based on current market trends. The property manager is.
Free College Essay Supply and Demand Simulation. Supply and Demand Simulation Summary University of Phoenix ECO, Economics for Business I The Supply/Demand simulation involves acting as property. Essay on Supply And Demand Simulation - Introduction The Supply and Demand simulation involves acting as Property Manager for GoodLife Management, a property management firm that manages apartment complexes in Atlantis.
This simulation was an exercise in applying the supply and demand concepts based on current market trends.Download