October 10, 2013
Supply and Demand Simulation
The Supply and Demand Simulation was okay. I was still lost but doing on hands is good practice for me. The simulation discussed the microeconomics and macroeconomics concepts. The simulation tried to explained the concepts to me and what the principle of microeconomics and macroeconomics works. From what I could understand about the simulations was that they showed the shifts in the supply and demand curve and shows the rational for the shifts. From what I understand the shift analyzes the effects of the equilibrium price as well as the prices, quantities, and much of the decision made for the fictional company shown in the simulation. From what I understand, the price elasticity affects the demand and the pricing strategy for consumers.
The simulation used a fictional neighborhood called Atlantis. According to the simulation, the neighborhood is a decent place to live with amenities that city consumers demand. (University of Phoenix, 2012) The scenario given for the property is a two bedroom apartment to be rented in Atlantis which will shows us the effects of supply and demand with different scenarios with information about a management company who leased them. Also, the scenarios show how the price affects supply and demand in a competitive market which microeconomics is used. Microeconomic is the study of behavior on a smaller scale, for example homes and businesses (Colander, 2010), which brings us to our first scenario which represents just this. From what I understand is this property management company needs to make a decision on the rental rate required for the two bedroom available rental to decrease vacancies. This will increase the revenue (University of Phoenix, 2012). This is considered micro because the focus is on supply and demand.
However, after doing several attempts to get it right, I kept (like in class) in the simulation I was always over. I played with it several times my revenue was 1.79, vacancy rate was -10, shortage 50, quantity demand was 2,050 and the monthly rental rate in money was 800.00. This is why I do not sell AVON, bad management! I tried several times to get it right but I was either “shaky” or “risky”. For the risky I was not so much in the negative I was in the positive. I had increased revenue by 1.80, vacancy rate at 10, shortage was 200 (not good), quantity demanded was 1,800, and monthly rate was at $1,000 (University of Phoenix, 2012). Finally, paying more attention I got it! I finally I brought my vacancy rate to 15%, with a revenue of 1.79, shortage of 300, quantity demanded 1,700 with the rental rate of 1,050.
Now we go into another simulation speculating 2 years later, and I am back on shaky ground again! I leased out apartments too low. I didn’t not access the supply curve as I was asked, due to the my decision to rent 1,700 apartments month to month lease at $750.00, which is less total number available. My second attempt I think wisely and get into “good construction” identifying the correct rental rate! I bring the supply curve to an upward slope as I increased the rental rate my numbers of apartments supplied…