Simulation Essay
Microeconomics and the Laws of Supply and Demand: A Simulation
D. Buress
ECO/365
February 2, 2015
R. Caratao
Microeconomics and the Laws of Supply and Demand: A Simulation
The simulation this week was based on an apartment rental agency, GoodLife Management, in the fictitious town of Atlantis. GoodLife Mgmt. manages the month-to-month rental of 2- bedroom apartment units. By using different situations and assumptions, the simulation provides examples of how certain market factors can affect the supply and demand of GoodLife’s rental units over a period of years. The factors illustrated included GoodLife 's managerial vision, the effect of population changes within Atlantis and outlying areas, changes in customer 's preferences and the application of price ceilings. Through the progression of the simulation, several key concepts were presented, they were: 1) supply and demand, 2) market and price equilibrium, 3) shifts in supply and demand and 4) the potential effects of governmental imposed price ceilings.
Key Concepts
According to Colander (2013), microeconomics is the interaction and behavior of individual units in an economy. Conversely, he says that macroeconomics looks at the economy as a collective or aggregate. While microeconomics has a narrow view of the economy, macroeconomics looks at the economy from a broad perspective. The simulation presents Atlantis as a small, friendly city with adequate infrastructure, which makes it a suitable habitat. This view of Atlantis is a macroeconomic view considering this analysis covers a broad spectrum. Furthermore, the simulation continues to indicate that Atlantis has very little traffic and minimal pollution and crime. This analysis establishes a more narrow perspective of the city, examining individual components of Atlantis. At the very beginning of the simulation, you are subtly shown the existence of a monopoly within the apartment market in Atlantis. A monopoly occurs when there is only one firm
D. Buress
ECO/365
February 2, 2015
R. Caratao
Microeconomics and the Laws of Supply and Demand: A Simulation
The simulation this week was based on an apartment rental agency, GoodLife Management, in the fictitious town of Atlantis. GoodLife Mgmt. manages the month-to-month rental of 2- bedroom apartment units. By using different situations and assumptions, the simulation provides examples of how certain market factors can affect the supply and demand of GoodLife’s rental units over a period of years. The factors illustrated included GoodLife 's managerial vision, the effect of population changes within Atlantis and outlying areas, changes in customer 's preferences and the application of price ceilings. Through the progression of the simulation, several key concepts were presented, they were: 1) supply and demand, 2) market and price equilibrium, 3) shifts in supply and demand and 4) the potential effects of governmental imposed price ceilings.
Key Concepts
According to Colander (2013), microeconomics is the interaction and behavior of individual units in an economy. Conversely, he says that macroeconomics looks at the economy as a collective or aggregate. While microeconomics has a narrow view of the economy, macroeconomics looks at the economy from a broad perspective. The simulation presents Atlantis as a small, friendly city with adequate infrastructure, which makes it a suitable habitat. This view of Atlantis is a macroeconomic view considering this analysis covers a broad spectrum. Furthermore, the simulation continues to indicate that Atlantis has very little traffic and minimal pollution and crime. This analysis establishes a more narrow perspective of the city, examining individual components of Atlantis. At the very beginning of the simulation, you are subtly shown the existence of a monopoly within the apartment market in Atlantis. A monopoly occurs when there is only one firm
References: Colander, D. C. (2013). Microeconomics (9th ed.). Retrieved from The University of Phoenix eBook Collection database.