Supply and Demand

As property manager of GoodLife Management of Atlantis, a property management firm that manages seven apartment complexes in Atlantis with a monopoly in this market, it is the responsibility of the property manager to receive 30-day notices for vacant apartments, establish new rental rates, and advertising schedules.

• Identify two microeconomics and two macroeconomics principles or concepts from the simulation. Explain why you have categorized these principles or concepts as macroeconomic or microeconomic.

Economic theory is divided into two parts: microeconomic theory and macroeconomic theory. Microeconomics is the study of individual choice, and how that choice is influenced by economic forces. In the simulation two principles of microeconomics were highlighted, Supply and demand. The demand curve shows the quantities of a particular good or service that buyers will be willing and able to purchase at each price during a specified period. The supply curve shows the quantities that sellers will offer for sale at each price during that same period. By putting the two curves together, we should be able to find a price at which the quantity buyers are willing and able to purchase equals the quantity sellers will offer for sale. Macroeconomics is the study of the economy as a whole. In the simulation two principles of macroeconomics were highlighted, Supply and demand.

• Identify at least one shift of the supply curve and one shift of the demand curve in the simulation. What causes the shifts?

Supply and demand is one of the most fundamental concepts of economics and it is the foundation of a market economy. Demand is the quantity of a product or service is desired by buyers. The law of demand states that the higher the price, the lower the quantity demanded. In the simulation in order to increase the quantity demanded the rental rate would have to be reduced there end reducing the vacancy rate to the target level, which causes the demand curve...