Supply and Demand Simulation

The simulation showed examples of supply and demand based on managing rental apartments. The simulation showed increases and decreases that effect supply and demand by using rental scenarios. A decrease in the rental prices caused the demand to increase for two bedroom apartments. The demand of single family homes was decreased by an increase in two-bedroom apartments. Fewer houses were supplied with lower rent and more houses were supplied at higher prices. The simulation is a learning tool to see how supply, demand and the equilibrium affect the rentals. The simulation helped students in determining rental rates, vacant apartments, and the quantity of apartments that are rented for any given month.

According to the text, macroeconomics is the study of the economy in its entirety. Macroeconomics is studying unemployment, business cycles, business growth, and inflation. Microeconomics refers to studies of individuals and decisions made in business.

An effect of a microeconomic result would be a higher demand for maintaining the rented properties by an increase in rented apartments and employment would increase. If Goodlife wanted to reduce the vacancy rate, lowering prices of two bedroom apartments would increase demand of the apartments. Prices of the two bedroom apartments will rise as the demand for a two bedroom apartment increases. This equates to the microeconomic effect with increased revenue for Goodlife, Increased revenue equates to more money spent building additional buildings, maintaining and upkeeping the apartments to for tenants to live in. This simulation was isolated to specific area, Atlantis, and being limited to a specific area I would feel that this is a microeconomic principle. Thinking about this in macroeconomics terms, I do not think that this would be the same with numerous rental organizations in larger regions. I remember this as micro meaning small and macro being large. A second microeconomic principle I observed from the simulation was the students were to calculate the rental rate monthly that differentiates between supply and demand.

The simulation on supply and demand reflects how internal and external factors affect supply and demand in the economy. The company, Goodlife Incorporated,