Supply and Demand

Supply and Demand Simulation

The simulation deals with two-bedroom apartments throughout a city called Atlantis. The simulation focuses on the supply and demand of the apartments and it also acts as a tool to learn more about supply and demand cures as well. Each scenario covers a different aspect of supply and demand like equilibriums and the effect of price ceilings on supply and demand.

One microeconomic principle that I found from the simulation was based on the word “monopoly”. The rental company has a monopoly within the rental field because it happens to be the only rental organization in the area of Atlantis. A second microeconomic principle that I found in the simulation was the scenario where the student has to come up with a monthly rental rate in such a way that it would eliminate any imbalance in the quantity supplied and the quantity demanded.

Macroeconomics is a little more in depth, and it focuses on the entire economy. Colander (2010) stated, “It considers the problems of inflation, unemployment, business cycles, and growth” (p. 15). The fourth scenario in the simulation is an example of macroeconomics, it shows the effect of a new corporation moving into the town and how this event will affect the economy of Atlantis because there will be economic growth as well as a decrease in unemployment. The corporation moving to the town of Atlantis employs many people so obviously all the employees will indefinitely need a place to call home. Also, as growth rises in the real estate business, the price one pays to have a place to call home may also increase. Goodlife’s cost of apartment leases increase to $1400; previously they were only at $1150. As the demand increases the prices also increase. But when there were some families who could not afford the high rent prices, the government had to step in and they put a price ceiling on the prices charged by rental property owners. When there is a price ceiling, it means that by law, businesses are...