Supply and Demand Simulation - Paper
The city of Atlantis is a small city with plenty of parks, sidewalks and minimum traffic. Housing consists mostly of detached homes and apartments. The following is a brief description of the simulation that takes a person thru supple & demand of two bedroom units. Having to determine the monthly rate of the two bedroom units or the quantity needed at the monthy rate. As property manager of Gold Life Management, there are seven complexes that need to be managed. As we are the only firm that rents units, the responsibilities include receiving 30 day notices, establishing rental rates and setting advertising schedules. There are currently 2000 apartments that are month to month rental rates, with 28% leased.
Based on the first step of the simulation at a rental rate of $1000 per month, there were tenents for 1800 apartments, leading to a vacancy rate of 10% and a surplus of 200 apartments. The revenue for this is 1.80 million which is below the maximum possible. I was able to correctly identify the rental rate that we would need to charge to lease out all the apartments. The supply curve is at an upward slope, As we increased the rental rate, the number of apartments supplied increased. If we were to lease out all the 2500 apartments, the appropriate rate would be 1550
It has been two years and Good Life now manages 3000 two bedroom apartments and we were able to correctly identify the impact of increased population on the demand for two bedroom apartments on temporary, month – to – month lease. We were not able to identify the impact of the supply of these apartments correctly. An increase in population increases the demand for rented apartments, but does not affect the supply of these apartments. At any given rental rate, more people demand rented apartments. This results in an increase in demand. Thus, the demand curve shifts to the right. The increase in demand means that quantity demanded is more than quantity supplied at the original
Based on the first step of the simulation at a rental rate of $1000 per month, there were tenents for 1800 apartments, leading to a vacancy rate of 10% and a surplus of 200 apartments. The revenue for this is 1.80 million which is below the maximum possible. I was able to correctly identify the rental rate that we would need to charge to lease out all the apartments. The supply curve is at an upward slope, As we increased the rental rate, the number of apartments supplied increased. If we were to lease out all the 2500 apartments, the appropriate rate would be 1550
It has been two years and Good Life now manages 3000 two bedroom apartments and we were able to correctly identify the impact of increased population on the demand for two bedroom apartments on temporary, month – to – month lease. We were not able to identify the impact of the supply of these apartments correctly. An increase in population increases the demand for rented apartments, but does not affect the supply of these apartments. At any given rental rate, more people demand rented apartments. This results in an increase in demand. Thus, the demand curve shifts to the right. The increase in demand means that quantity demanded is more than quantity supplied at the original
References: University of Phoenix (2008). Economics for Business 1. Applying Supply and Demand Concepts, Retrieved April 26, 2010 from University of Phoenix ECO365 Principles of Microeconomics week 2 assignment simulation Web site http://mycampus.phoenix.edu/secure/resources.asp