Supply

Microeconomics and the Laws of Supply and Demand

ECO/365

Microeconomics and the Laws of Supply and Demand

Objectives

This paper will explain the issues with renting apartments to people who can afford to live in them and those people who cannot and how a company can just come in and take over an apartment complex.

The two, microeconomics that would be chosen is location and price. Location is very important for families, so that their kids would have a good education and feel safe where they choose to live, instead of dealing with drugs and crime, which is in every state whether people know it or not. When deciding to rent you have to make sure the people that you are going to rent to, that they will be able to afford it, rent now a days can be very expensive, no matter where someone lives. If they cannot afford the rent because maybe they lost their job or they have not gotten a raise because of the economy, they will look elsewhere to rent a cheaper apartment.

The two, macroeconomics that would have to deal with is another company coming in and changing things and the rent is being raised too high for anyone to rent. Then the real estate company might have to sell the apartment complex, to a new company and make a big profit from it, that way instead of it being an apartment to rent they could be turned into an office complex. Where other companies can come in and rent the office space for a lot more than an apartment would cost (Colander, 2013).

The shift of the supply curve would have to go upward and the quantity supplied increases, with an increase in price, it would add to the supply curve, with the increase in the rental rate, it would let the real estate company lease out more apartments.

The shift of the demand curve would put the real estate company in a downward slope and the quantity demanded increases as the price decreases. Where this will move down the demand curve, the only way that the real estate company can increase the quantity of...