Essay about Microeconomics and the laws of supply d

Submitted By emalee30
Words: 589
Pages: 3

Microeconomics and the laws of supply demand
ECO/365

Supply and Demand Simulation Since the early years of commerce, supply and demand have been a huge factor in the capitalist business system. For this assignment I was asked to take part in a simulation as a source for my paper. In the simulation I had to take part of a series of important financial decisions for a fictitious apartment management company named GoodLife and see how each decision would be impacted by different economic factors. In this simulation, I was able to see that the microeconomics concepts could be labeled in the changes of supply and demand as well as the equilibrium in the apartment market. That is because the factors would only affect a small part of the apartment market in which the company on this scenario operates. The macroeconomics concept could be labeled with the price elasticity and the price ceiling. This is because it has a broad impact bigger than the local apartment market. The simulation taught me that any shift on the supply curve or demand can impact significantly the economics status of a company. For example, if the demand curve shifts to the left, it will show me that there is a decrease in the demand of people looking for apartments and in turn will cause that less apartments be rented. When this happens it forces GoodLife to reduce their prices to make up for the income gap. This means that the equilibrium price is lower because the demand decreased even though the supply (quantity of apartments) stayed the same. Now if the curve was to the right, it will show that there is an increase in available apartments. Like for example if the company buys more buildings or they built new ones. Now if the demand stays the same, the best thing Goodlife can do is to lower rent prices to be able to fill every apartment they have vacant.
Supply demand and Curve shifts Microeconomics factors will have an important role when we look at the equilibrium price and quantity. The most important factor I saw in this scenario that determines the rental price is changes to supply and demand. This scenario gave several examples how different factors caused prices to increase and decrease. Macroeconomic factor on the other hand, can cause supply and…