Supply and Demand Simulation
ECO365
September 16th, 2013
Supply and Demand Simulation In the city of Atlantis there have been many changes over the last several years changing the supply and demand of rental property from Goodlife Management as well as the demand for permanent housing. Any change will invoke either an increase in rental charges or a decrease. Also throughout the course of Goodlife’s presence in Atlantis they have converted some of their 2 bedroom rental apartments into permanent condos that people can purchase. The text states that microeconomics is the study of the choices of individuals and how those choices can be influenced by economic forces. Goodlife Management, as previously stated rents two bedroom apartments and these apartment rental rates are based on the demand for the apartments and the actual supply of the apartments. The apartments will be in demand by individuals based on economic influences. On the other hand Macroeconomics is the study of the economy as a whole or big picture view. Macroeconomics focuses on inflation, unemployment, growth, and the cycles of business. A macroeconomic example from the simulation is the more industry that has moved to Atlantis causing more employment opportunities has caused an increase for permanent housing and the rental of apartments because the population is increasing. The simulation also touches on several instances where the supply and demand curve changed based on different factors. An example in the simulation of a supply a change in the demand curve is the first portion of the scenario. Susan Hearst wants the vacancy rate brought down to 15% or below while maximizing revenue. In order to bring the vacancy rate down we need to lower the monthly rent to increase the demand for the apartments. In order to maximize the monthly revenue we need to lower the rent until the