This simulation is about a business called GoodLife Management, they are a property management company running the apartment complex’s in the city of Atlantis. The next closes rental company to GoodLife is Oakridge Builders who rent detached homes. The simulation about GoodLife Management reflects supply and demand of the rental properties over a course of seven years. Some of the key terms discussed throughout this simulation are, supply and demand, equilibrium, and the shifts in the demand and supply curve.
Supply and Demand
In the simulation the demand is downward slopping as the price of the apartment’s decreased the demand increased. In the text demand is something that people are willing to pay for (Colander, 2010). If it is something a person cannot afford it is a want. The law of demand states “quantity demanded rises as price falls, other things constant” (Colander, 2010, p. 84). The shift in the demand curve is caused by increase of population of new people coming to Atlantis for jobs, creating more demand for apartments. When it comes to the supply curve of the simulation the curve is upward sloping, which means that when the rate for a rental increases, the number of apartments supplied will also increase. The cause of a shift in the supply curve could be new maintenance costs or more production, which causes the rental rates to increase and the supply for the apartments to also increase. With acquiring supply increase this gives GoodLife the opportunity to lease out more apartments.
In the simulation the equilibrium was met when the quantity of demand and the quantity of supply were met when the demand and the supply are equal. This occurs when a balance is met, and there are no incentives for either the consumer or the supplier to make any changes to his or her quantities. If the rental rate is above the equilibrium the quantity of supply is more than the quantity demanded. If the rental rate is below the equilibrium the quantity demanded is more than the quantity supplied. If the rental rate is to increase then the demand would decrease. When there is an increase in the demand that means that the quantity demanded is more than the quantity supplied from the original equilibrium. In the simulation GoodLife has more apartments demanded than they are willing to lease at that particular rental rate. When the rental rate is increasing the demand will go down. This will cause an upward slope in the supply curve.
Microeconomic and Macroeconomic Principles Two concepts of microeconomics presented in this simulation are supply and demand. It is shown in the fourth scenario where a company named Lintech helps to increase the population of Atlantis. This action will increase the population for the town by adding more jobs for the residents and also help the unemployment decrease. Having the opportunity to live close to a place of business is appealing to most people so this is an opportunity for GoodLife to increase their demand for rental. With this increase in the demand GoodLife will have to raise their rental rates from $1050 to $1400. As the demand increases so do the prices, this can affect some of the middle-class families that cannot afford the increased rental rates. In the seventh scenario the government put a price ceiling of $1550 on the monthly rates that GoodLife can charge, so the middle-class families can afford the housing as well.
Appling Supply and Demand After completing the simulation a real-world