Supply and Demand Simulation
January 15, 2012
Dr. Guthlac Kirk Anyalezu
Several factors containing variations such as, rises or declines in prices can alter the supply and demand as well. The paper will make an attempt to deliberate different economic values and aspects and how it is influenced by change. In the simulation, Good Life Management operates seven apartment rentals Atlantis, and over a period of 7 years has been adaptable with pricing due to modifications in demand.
Economics is described as “the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of society” (Colander, 2010). Basically, economics emphases on three points: 1) what, and in what way to generate 2) how to generate it and 3) who to generate it for. Microeconomics is the analysis of personal choices, and how that choice is manipulated by economic forces. Macroeconomics is the study of the economy as a whole (Colander, 2010).
When observing microeconomic principles, shortage is the main point that catches my attention. The more inadequate a service or product is the supplier will be able to charge an additional price for it. In the simulation when the invasion of workers started coming to Atlantis, Good Life was capable of raising the prices of their rental properties. Customers had the option of to rent the rental property at the price given, or continue to browse neighbors in town, where the rental rate may not be as expensive. An increase in the residents of Atlantis steered to an abundant demand for lodging. This in turn influenced an increase in rental rates. Succeeding would be prospect costs, which is the “benefit that you might have gained from choosing the next-best alternative” (Colander, 2010). Again, this comes down to customer selections. If somebody could live close to neighboring town and shell out a reduction of rent, they would have a lengthier commute. However if...