Supply and Demand Simulation
Timothy J. Vrabel
Axia College University of Phoenix
In the video, several principles and concepts of microeconomics and macroeconomics were simulated. In the simulated neighborhood of Atlantis, there are many amenities that customers demand. The simulation uses two bedroom apartments to teach the fundamentals of supply and demand. Several scenarios were used throughout the simulation to represent challenges with which management needed to contend. The scenarios showed how price can affect supply and demand while still being competitive within the market. Within the simulation, microeconomics are used. Microeconomics contends with smaller business sectors, while macroeconomics focuses on the entire economy (DifferenceBetween.net, n.d.). The simulation shows an example of microeconomics in the first scenario. Rental management within this scenario must calculate a rental rate for their two bedroom apartments that will decrease vacant units and increase revenue (University of Phoenix, 2012). This scenario relates to microeconomics because it aims toward supply and demand. The management team needed to decrease rental prices to decrease rental vacancy. Macroeconomics is represented in scenario two, which shows that the rental company has 2500 vacant rental properties. When determining a rental price, the management team needs to factor in all rental costs. When factoring rental price, management needs to consider factors such as maintenance. Rental price needs to be high enough to cover this factor but not so high that demand decreases.
Throughout the simulation, there are several examples of shifts in the demand and supply curve. By watching the simulation, one understands that there is a new company moving into Atlantis. This new company will bring an influx of new people within the community. This influx of new citizens will increase the demand of rental properties, shifting the demand curve to the right....
References: DifferenceBetween.net. (n.d.). Difference Between Microeconomics and Macroeconomics. Retrieved from http://www.differencebetween.net/business/difference-between-microeconomics-and-macroeconomics/
University of Phoenix, (2012). Supply and Demand Simulation. Retrieved March 10, 2012 from: www.ecampus.phoenix.edu
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