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Supply And Demand Essay

915 words - 4 pages

Supply and Demand Simulation
Supply and demand is an important concept for both macroeconomic and microeconomic. The week two assignment reveals how an apartment company in the city of Atlantis is changed by many different economic points. The microeconomics ideas can be shown as the changes in the supply and demand and even the equilibrium, since the topics are only having affects on the small apartment. The macroeconomic ideas can then put into the category as price elasticity and/or the price ceilings since they have a bigger impact on the overall region beyond the local markets.
This simulation had a shift in the supply curve and the demand curve which would cause bigger changes in ...view middle of the document...

If the apartments are not being rented in a timely manner, the easiest solution is to make a price adjustment to meet the microeconomic supply and demand conditions. When there are too many vacant apartments the company needs to adjust so that they are not losing money on those apartments. This simulation showed how failing to stay on top of the economic conditions could prevent a company from being in the positive. Throughout this simulation the company had to react quickly to the different opportunities and the different changes in the economic climate to make sure that the highest possible price could be collected on the available apartments.
Macroeconomic factors will also give your more information on supply and on demand shifts that will have a bigger influence on the equilibrium price and also the quantity. The Price ceilings are there to have a stopping point for any rent that can be billed to the tenant, which will prevent the management company gaining maximum profit. The price elasticity will also be affected since it will be impossible to obtain the full influence of elasticity when a price ceiling in the contract.
Microeconomic factors also have an important role as well when it comes to the equilibrium prices and the quantities. The ever changes to supply and to demand are possibly the most important part that can determine a rental price in this simulation. Several examples of supply and demand changes in the local apartment market which caused both the increases and the decreases to prices. The economic conditions caused by the company to always seek the equilibrium price so that the demand will be filled at the best possible price. This is a basic...

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