Applying Supply and Demand Concepts Simulation
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The Supply and Demand simulation involves acting as Property Manager for GoodLife Management, a property management firm that manages apartment complexes in Atlantis. This simulation was an exercise in applying the supply and demand concepts based on current market trends. The property manager is required to adjust the monthly rental rate of two-bedroom rental apartments and number of apartments available. Supply and demand within the simulation were manipulated by the rates charged for the rentals, the economy, income, and personal choice. All of these characteristics affect the proportion of vacant as well as occupied apartments.
The key process that causes a shift in supply and demand is cost. As the cost of rent went down the vacancy level decreased. The peak point of revenue occurs when the rental cost is $950 as this creates a 1.81 million dollar revenue. This is the peak part of the supply and demand curve. The goal then would be to lease all apartments to achieve the full revenue potential. You then need for the balance to be the equilibrium quantity.
The location of the property causes an increase in its demand if it is in a preferred locality, the availability of facilities.
Factors that affect supply and demand in the simulation are driven by the availability of the rental apartments, the demand for the rentals, the number of available renters, and the price. According to the simulation, a demand curve is downward sloping. In the simulation, as the price decreased, demand increased. The supply curve, on the other hand, is upward sloping. The quantity of two-bedroom apartments increased as the price increased. A surplus in the market for the apartments exerts downward pressure on the price. This means to attract the possible renters, GoodLife would need to lower prices. On the other hand, a...