Supply and Demand Simulation
The contents of this paper summarize the findings of the economic ¬¬simulation on the student website in regard to supply and demand. The simulation takes place in the town of Atlantis, which uses the rental of a two-bedroom apartment and the effect supply and demand has on those rentals through various scenarios. GoodLife is a property management company that manages the apartment rentals in Atlantis. Currently, GoodLife is the only company who manages these rentals. “The closest substitute is rental detached homes, provided by Oakridge Builders” (Apollo Group, Inc. 2003). Through this paper I will identify two microeconomic and two macroeconomic concepts from the simulation, and explain why these concepts have been categorized what they are. I will also explain one shift in the supply and demand curve, what causes the shifts and how these shifts affect the equilibrium price, quantity, and decision-making.
Two Microeconomic and Macroeconomic Principles or Concepts
Macroeconomics studies the entire economy. Colander (2010) stated, “It considers the problems of inflation, unemployment, business cycles, and growth” (p. 15). Both the fourth and seventh scenarios in the simulation are examples of microeconomic concepts. In the fourth scenario, the population increases as Lintech’s company expands their operations to the town of Atlantis. This move will increase the population as more jobs will become available decreasing the unemployment rate. People enjoy living as close to his or her job as possible, which is why so many will want to move nearby therefore creating an increase in the demand for GoodLife’s apartment rentals. In response to meeting this demand, GoodLife will have to increase its current monthly leases from $1,150 to $1,400. In the fourth scenario, the government imposed a price ceiling to the rental rates of GoodLife’s two-bedroom apartment rentals. Imposing a price ceiling on the amount GoodLife can charge for their...