Supply and Demand Simulation
Alisha Alva
ECO/365
December 2, 2013
James Dalton

Supply and Demand Simulation

• Identify two microeconomics and two macroeconomics principles or concepts from the simulation. Explain why you have categorized these principles or concepts as macroeconomic or microeconomic.
Microeconomic concepts present in the simulation are supply and demand. The simulation talks about the supply and demand on the rental apartments in Atlantis. Supply referring to the rental apartments and demand referring to possible tenants needing to rent the apartments. The first scenario illustrates how the company is deciding to reduce the rental rates to increase occupancy or reduce the vacancy percentage.
Macroeconomic present in the simulation are when the simulation refers to the changes in population trends when it comes to choosing to rent apartments or choosing to rent houses, as well as the factors that influence these changes such as employment and changes in income.

• Identify at least one shift of the supply curve and one shift of the demand curve in the simulation. What causes the shifts? The first scenario is a good example of the demand curve, the demand curve tells the quantities consumers would demand at various prices of the product; however the more quantity is demanded at a lower price, other things remain constant. In the scenario Goodlife would like to lower the vacancy rate to 15% and maximize revenue, which causes a shift in the demand curve.
The second scenario has a shift in the supply curve, the supply curve tells the quantities a supplier would provide at various prices of the product. a higher price is an incentive to supply more, other things remaining constant. Therefore, as the rental rate increases, the number of apartments that GoodLife is willing to lease also increases. This could be because the maintenance