Supply_and_Demand

Supply and Demand Simulation Supply and Demand Simulation There are two microeconomic concepts in the simulation, one of which is the supply of the 2 bedroom apartments compared to the new supply of condominiums. The other concept would be the demand of the 2 bedroom apartments due to the change in income. These would be considered microeconomics because we are looking at a part of the housing supply and demand as a part of the whole supply of housing available in this community. Two macroeconomic concepts in the simulation would be the scenario involving the increase in the population. The supply of the apartments does not change, however the demand for these do increase. The other would be the scenario involving the price ceiling; these price ceilings affected the entire apartment rentals. The scenario involving the increase in population caused the supply curve to shift to the left and now there is a shortage in the supply of apartments. The demand curve has shifted to the right and now there are is more of a demand than the number of apartments that are now available. The equilibrium has been affected in that the demand is now more than the quantity supplied. The increase in the population has grown the demand, but has no affect on the supply. The demand has gone up; therefore the price has also gone up. Through this scenario, I have learned more about making a decision in purchasing or renting a home or property. There are many things to keep in mind in finding one within the price range that I’d be looking for. There would be several factors to consider, population, income, supply. These would determine the price of homes, rental property and condominiums. The concept of microeconomics gives me an understanding of the affects of supply and demand from preferences and choices from individuals, households and businesses. These choices affect the supply and demand, which in turn affects the prices of goods and services sold. The concept of macroeconomics provides an understanding on the affects that unemployment, income, government policies as a whole affects the equilibrium price and the quantity, without considering sub-groups. These factors affect the equilibrium of the pricing. The price elasticity was determined due to the fact that there were no alternate companies supplying 2 bedroom apartments for the community. If an individual or family wanted to rent a 2 bedroom apartment they would have to from the only company that supplied them, therefore there were no other available apartments at different prices.