An economy is managed, sustained, and manipulated by a multitude of varying factors. While the study of microeconomics focuses on the factors and decisions that people and business make based on resources, prices, goods and services, the study of macroeconomics, takes a broader approach such as the nations’ economy or the GDP. Nevertheless, both micro- and macroeconomics provide fundamental tools when studying the economy. This paper will discuss the examples of the supply and demand curves as they were presented in the simulation. In addition, factors affecting these curves such as changes in population, government, employment, and trend all take part in shifting these curves causing pricing or rental rates to increase and decrease accordingly. The concepts of microeconomics that trigger the changes in pricing which in turn causes shifts on both curves will also be discussed in detail. Finally, the paper will briefly address how this information could be used in my workplace and in my understanding of a real-world product which I am familiar with.
In the first scenario given in the simulation, the target plan was to increase revenue and decrease the percentage of vacancy from forty percent to fifteen percent. In order to do this, a decrease in the rental rate must occur in order to gain more potential tenants willing to move in at the lowered rate. This will ultimately lower the vacancy percentage as well. The more important factor to make note of in this simulation is that as the rental rates gets lower, revenue will increase and will continue to do so accordingly until a certain maximum is reached. Once that maximum revenue is reached, continuing to lower the rental rate will cause revenue to begin to decrease. It is important to know where that change occurs in order to keep revenue maximized at all times. Therefore, in this first simulation, the quantity demanded increased as the rental rate decreases causing revenue to increase and even...
References: Phoenix, U. o. (2014). Supply and Demand Simulation. Retrieved from Student Website.
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