Supply and Demand
ECO 365 Microeconomics
Supply and Demand
In economics, the two words supply and demand are the most commonly used words because they provide a good off-the-cuff answer for any economic question. The economic theory is divided into two parts: microeconomic and macroeconomic. These theories are very much interrelated (Colander, 2010). Consumers demand more, and suppliers try to meet these demand. In the simulation, a supply and demand for rental apartments is addressed. In the following paragraphs, two microeconomics and two macroeconomics principles, one shift of the supply curve, and one shift of the demand curve will be identified. An analysis for the equilibrium price, quantity, and decision-making will be given, along with how the concept of supply and demand can be applied in the workplace. The concepts of microeconomics and macroeconomics from the simulation will be discussed to the shifts in supply and demand on the equilibrium price and quantity. The way price elasticity of demand affects a consumer’s purchasing and the firm pricing strategy will be given.
Microeconomics and Macroeconomics Principles
The microeconomics principles in the simulation for the good of the company is that GoodLife Management lower their rental rate to increase their quantity demand and to bring down their vacancy rate to 15% with an increase in revenue maximize. The macroeconomic principles is the increase in population and more demand for living arrangement to supply apartment to economy as whole, GoodLife Management will have to lower rental rates and lease from month-to-month.
Supply and Demand Curve
Various factors cause a shift in demand and supply about increase and decrease shifts. The increase population caused an increase in the demand for two-bedroom apartments on a month-month lease but this increase caused an impact on supply. The demand curve is downward sloping, and that quantity demanded increases as the price decreases. As...