Supply and Demand Simulation
January, 14, 2013
Supply and demand are the two influences that govern pricing in the larger picture of a viable economic market. The two factors are like two forces. Equally the conclusive levels of supply and demand, and the comparative levels of the two in contrast to one another, are significant. The standard of supply and demand is that if one or both varies, there will be a transient difference in the amount of product manufacturers are equipped to sell and the quantity that consumers are willing to buy. This difference will cause the market price to increase or decrease when necessary until the quantities are the same.
Microeconomics and Macroeconomics in the Simulation
In the simulation there were examples of both microeconomics and macroeconomics. Good Life Apartments exhibits behaviors that would be considered microeconomics. For example, their decision to sign month to month leases and the changes in their rental rates per two bedroom unit. The government putting a cap on the maximum amount of rent so that middle class families have the opportunity to live and work in the city was a case of macroeconomics. Another example of macroeconomics is the increase in people that need apartments. This is because microeconomics is when a business or firm makes a decision that affects their company and macroeconomics is when something affects the whole country, like unemployment or inflation (University of Phoenix, 2012).
Supply and Demand Curve and its Effect on the Equilibrium Price, Quantity, and Decision Making
Supply and demand curves can be applied to describe differences in an economy such as the typical price level and the amount of total output. In the simulation an example of a supply and demand curve was when The Atlantis Housing Survey offered their findings on the demand of a two bedroom apartment in Atlantis. When the demand is high, the supply rate...