Supply and Demand Simulation
The Supply and Demand Simulation consist of microeconomics and macroeconomics concepts. The concepts are explained and show how they apply to the principle of microeconomics and macroeconomics. The simulations demonstrate shifts in the supply and demand curve. 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 has an effect on the pricing strategy for consumers and companies.
In the simulation, 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 scenarios show how price can affect supply and demand while being competitive within the market. Microeconomics is the study of behavior on a smaller scale, such as households and businesses (Colander, 2010). In the first simulation microeconomics concepts are used. This is because the property management company has to make a decision on the rental rate required for the two bedroom rentals that are available to decrease vacancy and maximize revenue (University of Phoenix, 2012). The scenario is related to the principle of microeconomics because the focus is on supply and demand. To decrease supply of vacancies, the company has to increase demand by lowering rental rates. Macroeconomics is the study of the behavior of the economy as a whole (Colander, 2010). Macroeconomics is presented in the second scenario; it shows that the property management company has 2,500 available rentals. The company has to find what rental rate to input so that all expenses in renting out apartments are covered. The property management company has to consider current cost of maintenance to the apartments as each apartment is rented (University of Phoenix, 2012). The company...