The Supply and Demand Simulation was very insightful. I related to it since I am in property management although I did have some difficulty with the reasoning. The simulation was designed to help us understand demand and supply as well as the effect of a price ceiling on a specific quantity as well as the quantity supplied. According to our textbook, Microeconomics Is the study of Individual choice and how that choice can be influenced by economic forces.
In this simulation, the city of Atlantis has a property management company by the name of Goodllfe Management who is responsible for leasing two bedroom apartment homes that are in high demand. The two microeconomics principles are the supply of the two-bedroom apartments and the demand for renting them. Macroeconomics is the study of the economy as a whole. It considers the problems of Inflation, unemployment, business cycles, and growth. The macroeconomic principles that are a factor is the increase in the population and growth of the city that has caused an Increase in the demand of he apartments.
The increase of the population had to deal with the economy because of a new business opening up and therefore creating Job opportunities. Since the city of Atlantis ’employment rate Is rising the demand for the apartments will increase and decrease as is the concept of macroeconomics. The simulation accurately details what happens to the platform of supply and demand when there are changes to the rental market as there was in the city of Atlantis.
The simulation reflects what changes occur in supply and demand when there Is a need to Increase he occupancy rate to the increase of new residents as a result to the growth of the new economy. When the rate of occupancy Is low Is causes the rate of vacancy to be high showing an increase of the available apartments. When you have a high vacancy It will cause the prices of the rental units to drop In order to fill up those vacant units. By the same token, when the occupancy is high the rental prices will go up for any vacancies that may exist.
This economic factor is a cause that will directly reflect the supply and demand curve. When the company decided to expand in Atlantis it aused for the population to grow that caused the rental prices to increase. This causes a direct effect on the supply and demand curve. The shifts In the supply and demand curve will affect the equilibrium price directly each time there is a shift. The Increase In population caused for the rental prices to Increase Just as the low vacancy affects the rental rates that consumers will pay.
The equilibrium price is determined on what action Is being taken by the decision maker. The decision will be based on what the economy is showing at the time. This simulation was very realistic o me because am In property management and I can relate more than most of the 1 increase our occupancy with making the right decisions when it comes to the prices that we will set for our rental rates and how realistic of an outcome we will have. The concept of microeconomics and how it will affect my Job are clear to me due to the examples in the simulation.
I learn a lot easier when I have examples that I can base my thought process on. The study of microeconomics and the factors that affect the shifts in the supply and demand are easy for me to follow because the example was egarding property management. I understand that all factors are affected when it comes to supply and demand and the economy as a whole. The result of our successes will rely on what the economy holds at the present time. Each individual makes a choice depending on the economy and their own personal finances. The reality is that our finances are affected by the economy and our Jobs.
In my particular situation, I understand the luxury of having a good Job but I also am realistic in knowing that it is a close and competitive market and my Job can change at any time. In property management a manager’s success and reputation is built around their complex, their vacancy and occupancy rate and their customer service. Realistically, however, the prizes and recognition come to those who have a high occupancy rate and continuously maintain a low vacancy. The prices are determined on what the market is showing at the time. Price elasticity will always affect a consumer’s purchasing strategy as well as a firm’s pricing strategy.
The simulation clearly showed the effect that the consumer and the economy as whole will have a direct influence n the market. Although microeconomics and macroeconomics are two different studies they complement each other well in this simulation. It is important to understand they will both work together in the workplace. The price will be affected since ultimately the consumer will have the power to affect the market. In property management, when there is a vacancy we as a company will do whatever it takes to fill it up. We will run specials in order to get the opportunity to get the people in the door and fill up our vacancies.
First month rent free or half off first month is typical to ffer as a special when the vacancies are high and our owners do not want to lost money. At the same time, when our vacancies are low and our occupancy is high, there are no specials or discounts that are given to consumers. This to me is the definition of elasticity and the power that the consumer has. I learned a great deal from this simulation and I hope to learn more in this class by exercises such as these. Economics as whole is a hard subject because there are so many factors to learn but I am hopeful that after this class I will understand it better.