Eco365 Supply and Demand Simulation Paper

Economic equilibrium, Cost-of-production theory of value, Supply and demand

Supply and Demand Simulation
Supply and Demand Simulation
In the University of Phoenix simulation (2003), students are taken through the supply and demand of two-bedroom apartments in a city called Atlantis. The simulation itself is used as a tool to learn about the demand and supply curves as well as equilibrium. Other key learning points are the factors that affect supply and demand, the effect that a price ceiling has on the quantity demanded and the quantity supplied. Throughout the simulation, students determine the rental rates or how many apartments are rented out for a given month. A microeconomic principle that stood out at the beginning of the simulation was the use of the word “monopoly”. The simulated management organization has a monopoly in the rental field within Atlantis. I considered it to be a microeconomic principle in that it was limited to a certain region. On a macroeconomic scale, it would not hold true because of the fact that there are numerous rental management organizations throughout the world. The second microeconomic principle from the simulation was the scenario in which the student is to determine a monthly rental rate that will remove the imbalance between quantity demanded and quantity supplied at the rental rate of $1550 (University of Phoenix, 2003). I consider this to be a microeconomic concept because each industry or field has its own norm for quantity demanded which definitely affects how much is supplied. An example of this is that of exotic cars. There is a limited number of these vehicles in demand which results in the manufacturers of these cars to build only a limited amount. A macroeconomic principle that showed through in the simulation was that for any product, more quantity is demanded at a lower price, other things remaining constant. To apply that to a microeconomic scale using the simulation as an example, when the rental rate was reduced, more individuals were willing to rent...
tracking img