The laws of supply and demand are one of the most fundamental concepts in economic climate. In microeconomic, the supply and demand are a specific goods or services between individual buyers and sellers, while the supply and demand in macroeconomics are discussed in terms of all goods and services at a level of nation or region.
The supply and demand simulation provided an example of the market conditions by an apartment management company in the city of Atlantis that is impacted with numerous economic factors. The microeconomic concepts can be classified to the changes in supply, demand and equilibrium, in which the company makes decisions based on the changes of consumer and quantity supplied. On the macroeconomic, the concepts can be classified price ceilings and price elasticity, the both have a significant impact on the apartment market in Atlantis as a whole.
The microeconomic factor in the simulation displayed that a change in the demand curve or supply curve would cause significant changes to the economic setting. For example, in Atlantis, when a change of supply in the quantity of apartments increased, the price of rental decreased in demand at an equal rate. Therefore, the supply curve and the demand curve would shift to the right (see Figure 1). Another microeconomic factor in the simulation is consumer demand, which have significantly risen while the house needs increased by the employees in a new company after it settled in Atlantis. Macroeconomic factors can affect the supply and demand shifts that have a great impact on equilibrium price and quantity. In the simulation, price elasticity of demand in one of the macroeconomic factors that has an impact on regional apartment market of Atlantis. Price elasticity of demand and supply tells exactly how the prices respond to a change in the availability of alternatives (Colander, 2010, pp. 123-125). For example, when the demand curve shifted to left that the company was forced to lower prices. In the other words, the price elasticity of demand becomes very limited. Another macroeconomic factor covered in the simulation is price ceiling, which is the government puts limit on the price that allowed charging by landlords in Atlantis. With a price ceiling in place, the price of rent can not be charge more than the maximum. Microeconomic factors play a fairly significant role in equilibrium price and quantity. Changes to supply and demand are the most important factor for determining a rental price in the simulation. For instance, when the demand curve shifted to the right (see figure 2), which would be an increased demand for the apartment in the market. With an increase in demand, it would lead to a shortage of available units, and the price would need to rise in order to maintain equilibrium between supply and demand as shown in Figure 2 (Colander, 2010, pp. 89-93). The often-changing economic condition caused the management company …show more content…
The concepts showed in the simulation can be easily link to the real world situation as in the smart phone industry. Recognizing the effects of supply and demand in microeconomic factors can optimize business performance and maximize profitability. Macroeconomic factor can help to forecast the business movement in a region to whole market. However, both microeconomic and macroeconomic concepts are important to the business decision-making. The simulation provided practical example to the economic conceptions that has increased my understanding of the insightful application of
The supply and demand simulation provided an example of the market conditions by an apartment management company in the city of Atlantis that is impacted with numerous economic factors. The microeconomic concepts can be classified to the changes in supply, demand and equilibrium, in which the company makes decisions based on the changes of consumer and quantity supplied. On the macroeconomic, the concepts can be classified price ceilings and price elasticity, the both have a significant impact on the apartment market in Atlantis as a whole.
The microeconomic factor in the simulation displayed that a change in the demand curve or supply curve would cause significant changes to the economic setting. For example, in Atlantis, when a change of supply in the quantity of apartments increased, the price of rental decreased in demand at an equal rate. Therefore, the supply curve and the demand curve would shift to the right (see Figure 1). Another microeconomic factor in the simulation is consumer demand, which have significantly risen while the house needs increased by the employees in a new company after it settled in Atlantis. Macroeconomic factors can affect the supply and demand shifts that have a great impact on equilibrium price and quantity. In the simulation, price elasticity of demand in one of the macroeconomic factors that has an impact on regional apartment market of Atlantis. Price elasticity of demand and supply tells exactly how the prices respond to a change in the availability of alternatives (Colander, 2010, pp. 123-125). For example, when the demand curve shifted to left that the company was forced to lower prices. In the other words, the price elasticity of demand becomes very limited. Another macroeconomic factor covered in the simulation is price ceiling, which is the government puts limit on the price that allowed charging by landlords in Atlantis. With a price ceiling in place, the price of rent can not be charge more than the maximum. Microeconomic factors play a fairly significant role in equilibrium price and quantity. Changes to supply and demand are the most important factor for determining a rental price in the simulation. For instance, when the demand curve shifted to the right (see figure 2), which would be an increased demand for the apartment in the market. With an increase in demand, it would lead to a shortage of available units, and the price would need to rise in order to maintain equilibrium between supply and demand as shown in Figure 2 (Colander, 2010, pp. 89-93). The often-changing economic condition caused the management company …show more content…
The concepts showed in the simulation can be easily link to the real world situation as in the smart phone industry. Recognizing the effects of supply and demand in microeconomic factors can optimize business performance and maximize profitability. Macroeconomic factor can help to forecast the business movement in a region to whole market. However, both microeconomic and macroeconomic concepts are important to the business decision-making. The simulation provided practical example to the economic conceptions that has increased my understanding of the insightful application of