Supply and Demand Simulation
There are a number of factors that can cause a change in supply and demand. Jacksonville is experiencing this change first hand. A price increase or decrease plays an important role in supply and demand. For instance, local grocery stores have increased the amount of weekly deals that advertise lower prices so customers will purchase more of their goods. Home prices have decreased in hopes to stimulate the housing market. This scenario will cover the supply and demand change for two bedroom apartments managed by Good Life Management, and how they adjust to ever changing variables.
Initially there was an imbalance between the quantity demanded and the quantity provided. By decreasing the rental rate to $1,050 a month you have then reached the equilibrium. Lintech comes to Atlantis, and the demand for apartments increases. If Good Life Management increased the rental rates to $1,400 a month then they are able to accommodate the demand, and shift the supply curve. The population’s demand for apartments decrease due to increased income, Good Life Management was left with no choice but to lower their rent to $1,300 in hopes of attracting more tenants. These are examples of ever changing variables. One must be able to shift the supply and demand to balance the needs of the business.
The supply and demand simulation teaches the proper response to changes due to the shift in markets. The biomedical industry deals with supply and demand on a regular basis. When medical business is booming they are able to upgrade their equipment rather than fixing it. This becomes a decrease in demand for biomedical repair. CE-Tech balances that shift by also selling refurbished medical equipment. When the need for repair is down, and a company would like to upgrade, we then sell them a newer used model.
Understanding the concepts of microeconomics helps to further clarify the factors that affect shifts in...