Supply and Demand Simulation
University of Phoenix
May 9, 2013
ECO/365 - Principles of Microeconomics
The Supply and Demand Simulation consist of microeconomics and macroeconomics concepts. The concepts are explained and how they apply to the principle of microeconomics and macroeconomics. The simulations presents shifts in the supply and demand curve, the rationale for the shift is given. Each shift is analyzed showing the effects of the equilibrium price, quantity, and decision making for the company presented. An explanation of the price elasticity affects the pricing strategy for consumers and company. In the simulation a neighborhood called Atlantis is used. Atlantis is a nice neighborhood with many amenities that consumers demand (University of Phoenix, 2012). A two bedroom apartment rental in Atlantis is used in the simulation to present the effects of supply and demand. The simulation presents several scenarios that have been acquired by the management company of the two bedroom apartment rentals. The scenarios will show how price can affect supply and demand while being competitive within the market. In the simulation, microeconomics concepts are used. Microeconomics is the study of behavior on a smaller scale such as households and businesses (Colander, 2010). This is the opposite of macroeconomics. In the simulation the first scenario represents microeconomics. This is because the property management company has to make a decision on the rental rate required for the two bedroom available rentals to decrease vacancy and to maximize revenue (University of Phoenix, 2012). This is related to the principle of microeconomics because its focus is on supply and demand. To decrease supply of vacancies the company has to increase demand by lowering rental rates. Macroeconomics is presented in the simulation in the second scenario. Macroeconomics is the study of the behavior of the economy as a whole (Colander, 2010). The second scenario shows that the...
References: Colander, D. C. (2010). Macroeconomics (8th ed.). Boston, MA: McGraw-Hill/Irwin.
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