The simulation shows a number of changes that happen to the Atlantis population, as well as to the supply and demand of the apartment housing. Throughout the simulation there are two microeconomic principles being displayed as well as one macroeconomic. The equilibrium price is fluctuated due to shifts that take place within the supply curve and also the demand curve. Just like this virtual simulation on the website, there’s plenty of changes that can take place in a work environment that can affect the supply or demand. These types of changes create fluctuations in both the equilibrium quantity and the price within a realistic work environment.
While I looked at and went through the simulation, it became easy to see how the price elasticity of demand greatly affected both the firms strategy with pricing and the customer’s own personal decision to purchase. It’s clear that there are principles of macroeconomics and microeconomics in the simulation. A couple examples of microeconomics would be how the Goodlife Company and individuals made their choices based off of regulation and scarcity. While an example of macroeconomics would be the change that the government made that applies to a price limit on apartment housing for the Goodlife Company. Governments regulation of the price ceiling would always classify as macroeconomics simply because it has a bunching effect on the whole overall local economy. So an individual’s own consumer choices leads to increases and decreases in demand that can then allow the company to respond. Then the company alters or modifies its pricing so that it can gain equilibrium as a reaction to the demand of the consumer.
The Essay on Supply And Demand Simulation 3
... price. Price Elasticity of Demand This simulation also go over the importance of price elasticity of demand. Now this concept shows the level of any changes in demand ... this could help adjust the equilibrium prices. Allowing the company to pass price saving to any consumers. Macroeconomics Macroeconomics looks at the aggregate that needs ...
However, this doesn’t always work out whenever government sets regulations on the price of a product. At the start of the simulation the company lowered rates to 1,050 dollars a month. If the company maintains this pricing strategy then they should be able to fill their vacancies for 1,700 different apartments, which would bring in 1.79 million dollars. When the company increased the price of an apartment they saw the demand take a decrease. The only way the company can increase the quantity demanded is if they significantly drop the rental price. This is because the supply of apartments is limited. During this scenario the government regulation created a dramatic increase in demand and shortened the supply.
Together, these macroeconomic and microeconomic principles work together and lead to different fluctuations in the equilibrium point, supply and demand. Shifts in supply and demand cause the equilibrium price to fluctuate as the supply curve and the demand curve shift to the left and right. The shifts in the supply and demand will always lead to the fluctuation of the equilibrium price as the curves of supply and demand shift left and right. The simulation showed that when population increased, so did demand for 2 bedroom apartments. Eventually Atlantis matured, which lead to a dramatic change in house preference. To maximize its profits, the company chose to react to this by altering its prices to help maintain the highest possible occupancy of apartments. There was one part where the company decided to convert apartments to be more suiting for their consumer’s different tastes. When they did this, it caused the supply curve to shift over toward the left, but didn’t actually change the demand curve. This was because of the different changing customer preferences.
The changing of the company’s pricing strategy caused the supply and demand curve to move in either a downward or upward fashion, depending on the circumstances of the situation. The constant adjustment and fluctuation will continue while the company keeps at it to maintain the equilibrium of its price. Both microeconomics and macroeconomics have effects on the supply and demand that can be witnessed inside a real life work environment. When a business only has capacity to make a limited number of products then it has to take a look at the supply and demand curves in order to come up with an equilibrium point. This will be a place where the two points intersect and can maximize their profits. This is where the quantity that’s demanded by a consumer will equal the quantity that can be supplied by the business. If a business prices something at a point that’s well below the equilibrium then the demand from the consumers will go over the actual available supply.
The Business plan on Demand And Supply Price Beer Prices
... for analyzing the effects of demand and supply on equilibrium price and quantity." 5 However economic analysis of demand and supply has many limitations and assumptions. ... on to consumers they would face lower profits, thus giving less dividends to the shareholders, which even might result in company going ...
This makes a shortage in the consumer market. If a business sets a price point well above the point of equilibrium then the demand decreases. If a business is looking to maximize its profit on a product then it has to maintain its pricing at the equilibrium point for supply that it can produce compared to the consumers’ demand. If a company is capable of supplying a large demand, but government regulation creates a price ceiling on something then there’d be a vast shortage of the supply within the consumer market. However, this can sometimes be deemed necessary in order to protect consumers. Thanks to government regulation, a business can’t increase prices as a reaction to a shortage in the market.
Effects like these on the supply and demand aren’t just limited to specific types of products and can be seen in other various forms among consumer services and products. If you look at the Atlantis situation you can view how price elasticity of demand affects the company’s pricing strategy and the consumer behavior. If prices are below the equilibrium point then the demand will be high. This caused a serious shortage in the apartment market. The company had to adjust the pricing strategy so they can attain equilibrium in order to maximize profit. When they adjust their prices to the point above equilibrium then the quantity of apartments would exceed demand. This will result in having a surplus of vacancies that don’t produce profit. The changes to the supply of housing, consumer demand and government regulation are all solid examples of micro and macroeconomics. This simulation showed a realistic series of events that real businesses have to deal with and make huge significant decisions to adjust their overall strategy for.
The Term Paper on Demand Curve and Supply Curve
... with price on the vertical axis and quantity purchased on the horizontal axis, these points form the individual demand curves for consumers A ... reflects the extent to which the real balances change the equilibrium level of spending, taking both assets and goods markets ... Economy and Taxation” (1817) On the Influence of Demand and Supply on Price. In The Wealth of Nations, Smith generally assumed that ...
