November 10, 2014
Microeconomics and the Laws of Supply and Demand
Identify two microeconomics and two macroeconomics principles or concepts from the simulation. Explain why you have categorized these principles or concepts as macroeconomic or microeconomic.
Supply and demand was affected by decreasing the rent to lower the vacancy percentage and maximize revenue for the company. This process is considered a temporary fix on a month-to-month basis and a good example of microeconomics. Another example of microeconomics is when the new company came into town and increased the population along with jobs. The population and job increase suggest they increase rental rates in response to the increase in demand.
An example of macroeconomics is the survey showing that individuals working in Atlantis are living in neighboring cities due to the rent being less. Another example of macroeconomics is when the government steps in and puts a ceiling of $1550 on monthly rent for 2 bedroom apartments so that middle class families can afford to live in the city in which they work. This caused the company to rent only a portion of their apartments in order to make a profit due to maintenance cost.
Identify at least one shift of the supply curve and one shift of the demand curve in the simulation. What causes the shifts?
The supply curve shifted down when the new car moved in increasing the population. The supply of the two-bedroom apartments will decrease. The demand curve went upward because of the population growth
For each shift, analyze how it would affect the equilibrium price, quantity, and decision making.
The increase in demand means that quantity demand is more than quantity supplied at the original equilibrium, and there is a temporary shortage in the market. When rental rate goes up because of the demand is higher, quantity demand decrease and quantity supplied increases,
References: Colander, D. (2013). Microeconomics (9th ed.). Retrieved from The University of Phoenix eBook Collection.