Supply and Demand Page Ã¯Â¿Â½ PAGE Ã¯Â¿Â½1Ã¯Â¿Â½ of Ã¯Â¿Â½ NUMPAGES Ã¯Â¿Â½4Ã¯Â¿Â½
This simulation helped familiarize this student with the demand curve, supply curve, equilibrium, and price ceiling. In the simulation, the user plays the part of Property Manager of GoodLife Management. GoodLife Management manages seven apartment complexes in Atlantis and is the only company that rents apartments; therefore it has a monopoly on the market. This means they can set the rental rate to any price they choose. Management also realizes that higher prices would keep some renters away creating less demand. In order to maintain a low percentage of unoccupied apartments, GoodLife has set a reasonable rental fee for their properties. As the Property Manager, duties include adjusting the monthly rental rate of two-bed rental apartments and the quantity supplied based on the market trends.
As population increased, demand for apartments increased as well. GoodLife was able increase rental rate without sacrificing the number of occupied apartments.
With the population boost, incomes raised as well. This led renters to become buyers, thus decreasing the demand for rental units. As a result, GoodLife needed to lower rent to attract more renters. In a further attempt to remain competitive, GoodLife renovated some apartments into condominiums. This allowed the company to reduce the supply of apartments that were in low demand.
Increased population was an asset in the beginning. As population grew, it became a drawback as traffic, congestion, and rental rates escalated. The government set a price ceiling on two bedroom apartment rentals in an effort to allow families to find affordable housing. The demand for apartments was again disharmonious with the supply available.
Presently, because of fluctuating gas prices, purchasing gasoline before weekends and holidays tends to save a few pennies at the gas pumps. The increase in the price...