Microeconomics and the Laws of Supply and Demand

ECO/365

Microeconomics and the Laws of Supply and Demand

Introduction Supply and demand dictates business and determines if a business is going to be successful or not. It is also a key part of the microeconomic and macroeconomic settings in a company. This week’s simulation showed how an apartment company in the city of Atlantis is affected by the business decisions of the company and the economic factors that are going on around them. The microeconomic concepts that can be pulled from the simulation are the changes in the supply and demand of their two bedroom apartments which the company is trying to adjust. The macroeconomic concepts that can be pulled from the simulation are the price elasticity and the price ceiling that the government has set because this has an effect on the area as a whole. Both of these economic factors play a key role in business and how a business has to adapt to the changes in the economic structures around them.
The Simulation The simulation brought to the light and showed that a shift in the supply curve or the demand curve or both curves could cause major changes in the economic environment of the economy around them and the company as a whole. The simulation showed that there was a demand for property, especially when Lintech Inc. moved into the area. There was a huge demand for the apartments and this caused Good life management to adjust prices to compensate for the demand to remain profitable. The supply and demand of a company is important to a company’s success. Keeping up with demand at the same time keeping prices competitive is two areas that a company needs to look at. Supply and demand determine what a company’s goals are going to be and what moves they will make in a business.

Macroeconomic Factors Macroeconomic factors can have an effect on a