Supply And Demand Simulation Analysis
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 …show more content…
Demand will either decrease or increase depending on the price of the product or service. Consumers tend to buy when prices are low, so companies will need to increase and decrease price according to demand. The simulation provided an example of price elasticity of demand; when the rental company’s supply was low, they raised they rental prices to lower demand. When the company had a surplus of vacant apartments, they lowered their price to encourage demand. Price elasticity of demand is elastic, so companies can use it for the immediate results they are trying to
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 …show more content…
Demand will either decrease or increase depending on the price of the product or service. Consumers tend to buy when prices are low, so companies will need to increase and decrease price according to demand. The simulation provided an example of price elasticity of demand; when the rental company’s supply was low, they raised they rental prices to lower demand. When the company had a surplus of vacant apartments, they lowered their price to encourage demand. Price elasticity of demand is elastic, so companies can use it for the immediate results they are trying to