ECO 365 Week 2

Topics: Supply and demand, Elasticity, Microeconomics Pages: 3 (739 words) Published: March 31, 2014

Supply and Demand Simulation
March 10, 2014
Ed Hartmann, D.B.A
Supply and Demand Simulation
Microeconomics and Macroeconomics
In the simulation the supply and demand was affected due to the decreasing of the rent in order to lower the vacancy percentage and increase the revenue for the rental company. This is thought of as a temporary fix on a month to month lease basis and provides us with a good example of what microeconomics is. When a new company decided to move into town and increase the population as well as increase the number of jobs provides us with another good example of microeconomics. Because the population increased and the jobs increased means the rental rates are increased as well in order to respond to the increase in demand. The simulation also showed that people who were working in Atlantis were living in cities outside of town because the rent was less there, this is an example of macroeconomics. The government decided to take control of the situation by putting a ceiling of $1550 per month for a 2 bedroom apartment in order for middle class families to be able to afford to live within the city that they work in which is another example of macroeconomics. Because of the ceiling being put on the rental properties it caused the rental company to only rent a portion of their apartments so that they would be able to make some sort of profit because of the cost of maintenance. Shift of Supply and Demand Curve

The simulation showed us that when the new company moved into town increasing the population the supply curve shifted down because the supply of the two-bedroom apartments ended up decreasing. Because the population grew within the town the demand curve increased. Analyzing the Shift

When the increase in demand occurs this means that the quantity demand is larger than the quantity supplied from the initial equilibrium, which also means that there is a temporary shortage in the market. When the company increased the...

References: University of Phoenix. (2003). Applying Supply and Demand Simulation [Multimedia]. Retrieved from University of Phoenix, eco365 website.
University of Phoenix. (2003). Applying Supply and Demand Simulation [Multimedia]. Retrieved from University of Phoenix, eco365 website.
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