Supply and Demand – Good Life Property Management ECO 360, Economics for Business I

Essay by sholman121University, Bachelor'sA+, November 2007

download word file, 5 pages 4.3

Supply and Demand - good life Property management this paper examines the economic phenomenon of supply, demand and equilibrium. Using the fictional organization of GoodLife Property Management in the town of Atlantis, the paper will summarize how the supply and demand curve is used to determine the equilibrium in the market for the lease of two-bedroom apartments. In addition, the paper will determine the difference between movement along the shift of the demand and supply curves which includes the determination of how equilibrium is re-established after the curves shift. The purpose of this simulation is to understand how the apartment market is affected by supply and demand.

Decisions regarding supply, demand and market equilibrium require careful consideration. Many factors affect supply and demand such as preference, expectations, income, and rental rates. In order to make informed decisions the Property Manager must continually monitor supply, demand and industry trends in order to remain competitive in today's high performance, highly competitive environment.

In order to make these decisions the Property Manager of GoodLife Management will depend on his organizations experts, Susan Hearst, National Property Manager, and Hal Morgan, Regional Property Manager, to help make informed decisions when adjusting the monthly rental rates and quantities supplied of two-bedroom apartments.

GoodLife, as the only company offering apartments in the Atlantis area, currently has a monopoly on the market and can set the rental rate at their discretion. First, Susan Hearst, National Property Manager, has recommended that the vacancy rate be brought down to about 15%. In addition she has requested that the Property Manager maximize revenue. Understanding that the higher prices may keep some renters away Hal Morgan, Regional Property Manager, has recommended that the rental rates be lowered. The demand curve for the apartments is an imaginary line at a point in...