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Basic Concepts

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ECO 415
Basic Concepts Paper
Professor Anders
August 24, 2010

In today’s society, supply and demand is a concept that is fundamental to economics. Supply and demand foresees that the price level will move toward the point that equalizes quantities supplied and demanded. There is no talk about supply without the talk of demand, and vice versa. Supply is how much of something is available. Demand is how much of something people want. We deal with supply and demand in our everyday lives be it for leisure/pleasure or for business. Completing the student simulation of the supply and demand experience will assist our experience as students with recognizing the equilibrium of supply and demand as well as a balance. How do changes in the business environment cause changes in supply and demand? The company involved in this student simulation is called Good Life Property Management. The results of this simulation are based upon the difference in the supply and demand chain within the management company. The simulation also entails how the management company copes with the change in the rental market as well as the economy. Changes in the business environment, such as layoffs, income, rental preferences, etc. cause changes in the supply and demand field because that is how they make their profits. If more renters are choosing Good Life Property to live in, then the demand goes up and therefore the supply for more units are on the rise. This also allows for the management company to charge market rate rent instead of offering specials. Since the demand would be so high, the management company realizes that renters are willing to pay market rent versus paying a special rent price which could ultimately cost the management company some profits. For example, Hal Morgan countered Susan Hearst decision on renting out each of the units that were available because of the cost of maintenance that will go up. Therefore...