As property manager of GoodLife Management of Atlantis, a property management firm that manages seven apartment complexes in Atlantis with a monopoly in this market, it is the responsibility of the property manager to receive 30-day notices for vacant apartments, establish new rental rates, and advertising schedules.
• Identify two microeconomics and two macroeconomics principles or concepts from the simulation. Explain why you have categorized these principles or concepts as macroeconomic or microeconomic.
Economic theory is divided into two parts: microeconomic theory and macroeconomic theory. Microeconomics is the study of individual choice, and how that choice is influenced by economic forces. In the simulation two principles of microeconomics were highlighted, Supply and demand. The demand curve shows the quantities of a particular good or service that ...view middle of the document...
What causes the shifts?
Supply and demand is one of the most fundamental concepts of economics and it is the foundation of a market economy. Demand is the quantity of a product or service is desired by buyers. The law of demand states that the higher the price, the lower the quantity demanded. In the simulation in order to increase the quantity demanded the rental rate would have to be reduced there end reducing the vacancy rate to the target level, which causes the demand curve to shift to the right. As the rental rate is lowered, revenue initially increases, reaches a maximum at a particular rental rate and quantity demanded, and then increases. Supply represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price. The law of supply states the higher the prices, the higher the quantity supplied. Producers supply more at a higher price because selling a higher quantity at price increases revenue. In the simulation
• For each shift, analyze how it would affect the equilibrium price, quantity, and decision making.
• How may you apply what you learned about supply and demand from the simulation to your workplace or your understanding of a real-world product with which you are familiar?
• How do the concepts of microeconomics help you understand the factors that affect shifts in supply and demand on the equilibrium price and quantity?
• How do the concepts of macroeconomics help you understand the factors that affect shifts in supply and demand on the equilibrium price and quantity?
• Relating to the simulation, explain how the price elasticity of demand affects a consumer’s purchasing and the firm’s pricing strategy.
Microeconomics and macroeconomics are very much interrelated. What happens in the economy as a whole is based on individual decisions, but individual decisions are made within an economy and can be understood only within tha