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.
The microeconomic topics would be the demand and supply curve. The demand curve shows how consumers would react to prices. The supply curve shows how landlords would react to price by how much units will sell. The outside company coming in and the price cap would fall under macroeconomic. They show what will happen with outsides forces on the supply and demand curves.
Identify at least one shift of the supply curve and one shift of the demand curve in the simulation. What causes the shifts? There are two shifts in the simulation. The first shift shown was the demand curve, and this was related to prices. As the prices of the apartments move up the numbers of tenants move up. As the price of the apartment go up there are less willing to rent and therefore the curve moves to the left. The supply curve is moved by how many units the company wants to lease out. The more units sold than the more money the rental company will charge.
For each shift, analyze how it would affect the equilibrium price, quantity, and decision making.
The shift of the demand curve is affected by the price of the units sold. The higher the price the more to the upwards that the curve will follow and there will be more units vacant and less money made. Lower prices will lead to a lower vacant rate. This will lead to a high profit in the short term but will eat profits if the price is too low. The supply curve is moved by the number of units offered and how much the company is willing to lease each unit. As more units are occupied this will lead to a higher demand and therefore the company can raise the price. The rental company has to find a point where the supply curve meets the demand point where the price is low enough for renters but high enough for profits.