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…
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…
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…
recently eliminated a quantity control that was placed on the amount of patients one business can supply. The article explains that the demand for medicinal marijuana has always been strong but the supply has never been able to fit the amount of consumers. Now that there is no more quantity control by the government, the industry is booming and the supply is now living up to the expectations of demand. The government taxes this new good and the immense amount of consumers makes it a great source of…
Supply and Demand Simulation
To identifywhich portions of the microeconomicsand macroeconomics principles are which in this simulationwe have to understand the difference between the two economical concepts first. Microeconomics is the study of the goods and services of the world and how they are affected by ways of the world. For example gas prices go up during the summer time for a reason other than oil companies wanting to make record high profits. The gas prices go up during…
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…
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…
higher-resolution 4 inch screen with 16gb, considerable improvements of the previous model 4s. The phone is used as tele communications device used by a range of consumer for a range of purposes including personal, business and organizational.
The demand of a product is determined by the amount of a good or service that a consumer is willing and able to purchase at any given price (Hubbard, 2010, pg 62). The I phone 5 provides a top of the range product which allows consumers to call, text, email…
Price Elasticity of Demand Report
Introduction to Microeconomics/ECO102
March 25, 2013
Price Elasticity of Demand
This paper will discuss about price elasticity of demand and factors that affect price elasticity of demand. Elasticity can be described as a measure of the sensitivity of demand for goods or merchandise to changes in price. Price elasticity determines how much of an impact a change in goods or…
Supply and Demand
August 12, 2013
There were two microeconomics and two macroeconomics concepts in the simulation. Atlantis is a microeconomics apartment company which manage apartment complexes and homes in the city. Atlantis had one shift supply curve and one shift in the demand curve when business started moving into the city. These shifts affected the equilibrium price, quantity, and decision making with the demand needed to supply to consumers…
rate of 3%?
Answer: P = $40/(0.05 - 0.03) = $40/0.02 = $2,000
Topic 2: Supply and Demand
1) Suppose that the demand for oranges increase. Explain the long -run effects of the guiding
function of price in this scenario.
Answer: In the long run, the higher price of oranges will signal more firms to enter the orange
market, as it will seem more profitable than some other markets. As firms enter, supply increases, causing the price to fall relative to the short-run price and quantity…