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Submitted By mjk5924
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Michael Kennedy
Supply and Demand Simulation
ECO/365
University of Phoenix
March 4, 2014

Supply and Demand Simulation
Supply and demand is a very important part of business. However a large supply with no demand is not a good thing. There must be balance between the two so that neither the supplier nor the customer has to suffer. This balance point for these two is where businesses get their equilibrium price. The equilibrium price is the price toward which the invisible hand drives the market (Colander, D. C. (2010). In the simulation, the first of the scenarios has to do with lower the vacancy rate. This can be related to the unemployment rate of a country. In order to lower the vacancy rate the company had to lower the prices for the apartments. By doing this GoodLife has made a supply of housing. To lower the unemployment rate there would have to be larger supply of jobs. One of the microeconomic concepts is a monopoly. A monopoly is a market structure in which one firm makes up the entire market (Colander, D. C. (2010). In the case, the apartment company GoodLife is the only provider of apartments to the resident of Atlantis. The other microeconomic concept has to do with the supply and demand. In the simulation an organization, Lintech Inc, move into Atlantis creating a demand for housing. In order for GoodLife to keep up with this increase in demand, the company had to raise the prices for its apartments. GoodLife did not increase its supply of apartments, so by raising the rental rate the demand for these apartments goes down. This allow for the company to utilize all of its apartments for the highest price which can increase the profitability. Then for both decreases in the demand for the apartment, GoodLife had to lower the rental rate for its apartments. One of the decreases GoodLife converted 400 apartment builds into condominiums. This will

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