University of Phoenix
December 08, 2008
What causes the changes in supply and demand in the simulation? If the availability of the apartments were good and in a preferred location, this could have a direct effect on the increase in demand. When consumers look for a place to live the size of the home is crucial in their decision making as well of the economic conditions in the area. With the location, size and economic conditions all factoring into the decisions, the price of the apartments must be determined accordingly. The amount of rent a tenant must pay is usually fixed by the property owners and contracted out based on or determined by the supply and demand of the area where they are located. The amenities of the property and the stipulations in the contract can also be a determining factor for the supply and demand for the apartments. If the apartments are located in a residential area or in an area downtown close to businesses the supply and demand could possibly change depending on consumer preference.
How do shifts in supply and demand affect your decision making?
If I were looking to get into the business of real estate and wanted to build apartments I would look in an area that had a high demand for them. If the demand was high then I would increase the rent and the deposits that are required with the first month’s rent, but also continue to increase the supply as the demand grows. The types of people that landlords rent to will also determine the demand, so mi would be sure that I rent to people who have good jobs and a solid history of paying on time. I would also give the consumer a reason to rent from me rather than the apartments down the street by offering extra amenities that others do not such as water or...