Microeconomics and the Law of Supply and Demand Simulation
Autor: Heather Cone-Sealy • September 22, 2016 • Term Paper • 1,200 Words (5 Pages) • 806 Views
Microeconomics and the Law of Supply and Demand Simulation
Heather Sealy
ECO/365 – Principles of Microeconomics
May 16, 2016
Bobbie Murray
Introduction
When talking about the supply and demand simulation, we see that it addresses the principles and the concepts of microeconomics and macroeconomics. The shifts of the demand curves and the supply curves cause each to have an effect on one another with the quantity and the equilibrium price. The simulation presents examples with the decision-making process. In the simulation, the information that given is being related to real professional industries and world products.
Microeconomics and the Law of Supply and Demand Simulation
In the simulation of microeconomic and macroeconomic concepts in supply and demand we see shifts and changes, within these shifts is the changes in supply and demand, and also within the equilibrium price and quantity. Such as when Good Life Management had made an adjustment in the supply level of the two bedroom apartments that they have based upon the demand within the Atlantis Community. A challenge has been given to Good Life Management to look at price ceiling, income and the population of Atlantis.
When it comes to microeconomics, the focuses that are needed, come from the firms and on how the individuals are making decisions based on the forces of economics. A principal of microeconomics is supply and demand, in the simulation, it is shown where a particular price of the two bedroom apartments. What is happening in the simulation is the effects based on the demands per each unit considering the market conditions at any given time. To maximize profit, the Good Life Management Company has to strategize a way to find a determination amount of each apartment to find the right price level.
As a whole, the study of the economy is macroeconomics. Macroeconomics will consider problems of cycles of business, growth, or inflation. “Macroeconomics focuses on aggregate relationships such as how household consumption is related to income and how government policies can affect growth.” (Colander, 2014, Para. 11) The concepts that come from macroeconomic in the simulation are the business cycles and population increase in Atlantis. The Good Life Management Company increases their two bedroom apartments based on what the expected demand units give that is within the economic climate.
The Causes of Shift, How Each Shift Affects the Equilibrium Price, Quantity, and Decision
Making
The growth populations in Atlantis have influenced the apartment housing increases. The cycle of businesses brings aid to the Good Life Management, by determining the abilities of the housing supplies. “A production possibility curve (PPC) is a curve measuring the maximum combination of outputs that can be obtained from a given number of inputs. It gives you a visual picture of the tradeoff embodied in a decision. The production possibility curve is a curve measuring the maximum combination of outputs that can be obtained from a given number of inputs.” (Colander, 2014, Para. 7) Atlantis has had an increase of populations and demands for two bedroom apartments, so the demand curves have shifted by the equilibrium price. Because of the enormous shortages in the market for apartments, there has been an upward pace and pressure on prices, so the Good Life Management Company can rent many more apartments at the given rates of the company.
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