Applying supply and demand concepts
The demand curve is downward sloping, and that quantity demanded increases as the price decreases that are as you move down the demand curve. GoodLife could increase the quantity demand of its rented apartments only by reducing the rental rate. The supply curve is upward sloping, and quantity supplied increase with an increase in price- that is, as you move up the supply curve. An increase in rental rate would cause GoodLife to lease out more apartments. Demand and supply are not static: various factors cause them to increase or decrease. For instance, and increase in population caused demand for GoodLife’s two bedroom apartments to increase, but a change in preferences caused demand to decrease. Similarly, a change in expectations caused a supply of two-bedroom apartments to decrease. These factors cause the demand or supply curve to shift to the right (increase) or left (decrease). A change in price, on the other hand, causes upward or downward movement along the same demand or supply curve. The effect of a price ceiling on the quantity demanded and quantity supplied of two-bedroom apartments. A price ceiling below equilibrium causes shortages because at this price, consumers’ quantity demanded exceeds producers’ quantity supplied. In such a scenario on-price methods of rationing the limited supply of two-bedroom apartments may come into the picture. Marginal techniques are used in economics to study how specific variables are studied in terms of the effects of related variables and the environment in which it affects. The marginal looks to weigh options to see what will affect an outcome if supply and demands are increased and decreased according to an areas revenue and business increase and decrease. The marginal outcome allows a company to also see what it will gain by giving up other areas within the company. GoodLife gave up a number of apartments at a higher rate and decreased the rate and gained more tenants and...
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