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ECO365 Week 2 Simulation

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ECO365 Week 2 Simulation
Simulation
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Simulation
The supply and demand factors are essential to the work of economics. The use of these demand curves help businesses to maximize profits and the supply curve depicts the best price for the most product. These statistics are shown on a graph, which changes according to the supply and demand in a particular market (Colander, 2010). This simulation is an example of Good life property apartment rental supply and demand. This paper will discuss two microeconomics and two macroeconomics principles or concepts from the simulation. Also it will identify at least one shift of the supply curve and one shift of the demand curve in the simulation. In addition, it will discuss the effects of supply and demand in the workplace. Last, Relating to the simulation, it will explain how the price elasticity of demand affects a consumer’s purchasing and the firm’s pricing strategy.
Two microeconomics and two macroeconomics principles
Within this simulation are multiple examples of microeconomics and macroeconomics. One example of microeconomics is Good life property raising or lowering its rental rate for the apartments. Because it is a business decision, it falls under microeconomics. Another example is the percentage of inventory that Good Life has allotted for rental of their inventory. Macroeconomics deals more with decisions made higher than the business itself. For example, the increase of income caused by the addition of Lintech, is macroeconomics. Also the government imposing a cap on the monthly rent of 1550 dollars for two-bedroom apartments is a macroeconomic decision.

One shift of the supply curve and one shift of the demand curve
The supply curve is represented by a gradually increasing line on the graph of the scenario. The line represents the price and quantity for which apartments are purchased. For example, a shift in the supply curve was witnessed when the new business entered the area. The addition of Lintech


References: Colander, D. C. (2010). Economics (8th ed.). New York, NY: McGraw-Hill. Retrieved April 11, 2013 from The University of Phoenix eBook Collection database.
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