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Supply And Demand Simulation Paper

1195 words - 5 pages

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. The 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 the right, which naturally increases the rental rate as well.Shifts in supply and demand affect one's decision making according to if the property that one is managing is affiliated with an association because an association is ruled by the owners and bi-laws. The owners of such units are fully in charge of their properties and a property manager can only advise the association through the board of directors in regards to one's recommendations regarding such units. Effects on decision-making with regard to supply and demand truly depend upon an one's needs as a consumer or manufacturer, retailer or service provider. The trends within the market also have a significant effect on how a supplier or demander must react. Many factors are involved that alter a person's willingness, desire and most importantly, ability to pay for a good or service. Some of the obvious factors include income, taste, price, and available alternatives or substitutes and their prices.The four key points from the reading assignments that were emphasized to me in the simulation were: Demand and Supply, Equilibrium, Shifts in demand and supply and Price ceiling.How I would apply what I have learned from the...

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