Supply and Demand Essay

997 WordsDec 17, 20124 Pages
Supply and Demand Simulation ECO365 Supply and Demand Simulation Simulation The Supply and Demand simulation on the University of Phoenix website is a thorough depiction of how external forces and internal forces affect the supply curve and demand curve within and economic system. The simulations focused on the renting of two bedroom apartments in a city named Atlantis. Even though the company, Goodlife, Incorporated has an effective monopoly on two bedroom apartments in Atlantis, they still must fix the price of the apartments to manage revenue to reach the equilibrium point. Microeconomic Lowering the price of a two bedroom apartment will increase the demand for those apartments and reduce the vacancy rate for Goodlife, Incorporated. A microeconomic effect results as there is an increase in apartments rented there is an increase in employment requirements because of the higher demand for maintenance on the rented properties. When demand for a two bedroom apartment goes up, the price will be driven up as well. The microeconomic effect results in more revenue for the company, resulting in more money to spend building and maintaining those apartments for inhabitance. The microeconomic effects also drive macroeconomic effects. Macroeconomic When demand for apartments is lower than the available supply, there is less of a need for maintenance employees to care for the apartments that are rented. When those employees are terminated, they spend less money around the city of Atlantis. The reciprocal of that event, when the demand for apartments go up, the employment rate of maintenance personnel is increased as well. When there are more people gainfully employed in the city of Atlantis there is appositive effect upon its macro-economy. Both of these macroeconomic effects have a direct impact on the economy of Atlantis. Supply Shift

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