A supply and demand simulation was conducted online for each student to complete which referred to a company named Good Life which is a property management company. The simulation was based on the renting of apartment units to potential tenants regarding the supply and demand factors. Each student was a property manager and was to complete the simulation with an outcome of an understanding of the supply and demand situation and how the economy plays a role which impacts the end result.
A supply curve is the graphical representation between price and quantity supplied. The supply curve is upward sloping and quantity supplied increases with an increase in price. The supply curve for a product is an imaginary line at a point in time that tells one the quantities a supplier would provide at various prices of the product. The demand curve is downward sloping and that quantity demanded increases as the price decreases.
Perfectly inelastic demand
Perfectly elastic demand
XFIG-generated-supply-demandThe demand curve for any product is an imaginary line at a point in time. This tells one the quantities consumers would demand at various prices of the product (Colander, 2004, p.93).
The changes in the supply and demand simulation are caused by the student's input according to the supply and demand factors of that particular scenario which then leads to less revenue for the company or less occupancy of the rental units. A decision has to be made as to which would be more cost effective, profit or occupancy. In the simulation, adjusting the rental rate and the quantity supplied changes the level of supply or level of demand accordingly. When potential renters increase the quantity that is demanded, the property managers at Good Life Management must increase the quantity of two-bedroom apartments that they are supplying. When this happens, the demand curve shifts to...