Micro and Macroeconomics play a large role in our lives on a daily basis. When it comes to deciding simple every day purchases, or setting prices for our company’s products, there are many factors and influences that come into play, all dealing with macro and microeconomics. In the case of the week two supply and demand situation, there were many things to be learned. In this scenario, one acts as the property manager for GoodLife Management, setting the rates and filling vacancies in apartments in the city of Atlantis. There were principles and concepts involving macro and microeconomics, shifts in the supply and demand curve, and effects that influence the equilibrium price and decision making of the apartments in question in the scenario provided. In the week two supply and demand simulation, one could identify many different microeconomic as well as macroeconomic principles or concepts. Two microeconomic concepts used in the simulation were the equilibrium principle and comparative advantage. According to Colander (2010), equilibrium occurs when “opposing dynamic forces cancel each other out.” In this simulation, equilibrium occurs when both supply and demand cancel each other out. Comparative advantage, also according to Colander (2010), essentially is the ability for one to produce a product or good more efficiently than other producers. In the case of the simulation, the GoodLife team has a monopoly on the market, thus they can provide units cheaper than other organizations. These two would be microeconomic concepts because they deal with “individual choices” (Colander, 2010). The macroeconomic concepts shown in the simulation are supply and demand. Supply essentially is the amount of units available, and demand would be the actual demand for the units available. These are macroeconomic concepts because they deal with “the economy as a whole” (Colander, 2010) including all of its influences. While “working” under this simulation as the property manager for GoodLife Management, one witnessed different influences of the both the supple curve and demand curve. In one scenario, the supply curve shifted downward after the price was dropped due low demand for the apartments. This shift occurred when detached homes became in demand, thus demand for the apartments dropped. In order to fix this issue, the price for the apartments had to be dropped, which would bring the demand up as they become more affordable to more people. This scenario also shows a change in the demand curve, as the demand curve initially dropped with the apartments being priced at a certain number, and affordable detached housing becoming available. When the price was brought down, demand began to rise back upward due to the supply dwindling. These shifts would have an effect on the equilibrium price, quantity, and decision making as well. The equilibrium price would shift downward as less are demanded due to cost, thus cost being brought down would eventually meet the price of the apartments offered. These shifts in supply and demand would also affect quantity, as when an apartment is overpriced and under demanded, there would be more apartments available. As the demand rises the supply would dwindle, and the quantity available would get smaller as well. These concepts involving supply and demand can be applied to many peoples own lives and workplaces. For instance, it explains why car dealerships always cut prices at the end of the year to make room for their new products. The dealership see’s that their supply of units is going to be outdated soon, and the demand has dwindled, thus to increase their demand for their units, they will bring down
Supply and Demand In reflection of this lesson, the team focuses on the simple fact, supply is how much of an item there is, and demand is how many people want to buy something. The laws of supply and demand explain how the market determines the price and quantity of goods to be sold. The team discussed in a meeting how the defining factor to understand is how an increase in supply can affect demand and on the ways that an increase in demand can affect future supply. This is kind of a general definition…
Demand and Supply Supply and demand analysis lets the manager see the bigger picture. Market research on the impact of pricing of product on its demand is done by keeping all the other related characteristics constant. To evaluate how many jeans would be sold at alternative prices you keep the consumer income, advertising cost etc constant. This fundamental is known as the law of demand. The price and demand are inversely related. This curve is a downward slope. Demand shifters – consumer income…
Elasticity of Demand Price Effect,___ Law of Demand, Moment along the demand curve The high the price the lower the quantity demanded. Non-price Effect ---- Shift Demand to the left and right.. 1. Income of the consumer can shift demand to the right or left…. Ie Demand of normal /luxury shift up when there is increase in income Price of inferior shift down when there is increase in income…. 2. Taste/ preference also shift Demand curve 2. Substitutes /complements. If the price…
Econ. 175: Microeconomics Olds – Chapter notes: Cowen & Tabarrock Chapter 2: Supply and Demand The Demand Curve (for oil) A demand curve is a function that shows the different quantities demanded at different prices. See Fig. 2.1, p. 14. A demand curve can be read two ways: o Horizontally, the curve shows the quantity demanded at a given price. o Vertically, the curve shows the maximum price consumers would pay for a given amount of product. The curve is “negatively sloped”…
Supply and Demand Simulation Supply and demand is a concept at the heart of both macroeconomics and microeconomics. The fictional apartment management described in the simulation is impacted by numerous economic factors. The microeconomic concept of changes in the supply and demand equilibrium is found in the simulation by affecting the apartment management companies local market. The macroeconomic concept of price elasticity and price ceiling are found in the simulation because they not only…
Supply and Demand Simulation John Ross ECO/365 February 24, 2014 Michael Blakley Supply and Demand Simulation In the simulation I had to address the effects of supply and demand and how it affects the supply curve, the demand curve, and when supply and demand reach a point of equilibrium. I was also able to see what impact a price ceiling has on supply and demand as well as determined the rental rate for two bedroom apartments. Finally, I looked at how the quantity supplied of two-bedroom apartments…
Supply and Demand Simulation This simulation is about a business called GoodLife Management, they are a property management company running the apartment complex’s in the city of Atlantis. The next closes rental company to GoodLife is Oakridge Builders who rent detached homes. The simulation about GoodLife Management reflects supply and demand of the rental properties over a course of seven years. Some of the key terms discussed throughout this simulation are, supply and demand, equilibrium,…
The Great Gold Heist of 2013: Exploding Demand & Falling Supply -- Posted Tuesday, 17 September 2013 By Steve St. Angelo, SRSrocco Report No one was prepared for the orchestrated take-down of the price of gold and silver in the first half of 2013. Forecasted supply was generously overstated while demand... grossly under-estimated. Thus, the tremendous imbalance had to be resolved which came to be known as "The Great Gold Heist of 2013." Not only were the investors taken by surprise…
Supply and Demand of the Market In the society we live in today there are many different outcomes in profit of firms and households based on how they manage their prices used in their businesses. A variety of factors influence the economy of this country such as demand, supply, or the income of the buyers. These few factors would either increase the profit of many businesses in the United States or decrease depending on how they shift. Also, based on that, there would be an effect on surplus of…