Supply and Demand

Supply and Demand Simulation
Keith B. Shaheen
ECO 365
June 6, 2013
Scott Skjordahl

Supply and Demand Simulation
      This paper will review the simulation of supply and demand from University of Phoenix website.   In the simulation GoodLife Management is a firm that manages multiple apartment complexes in the Atlantis area.   GoodLife management also has a monopoly on this market.   GoodLife management is responsible for managing notices for vacant apartments, creating rental rates for the apartments, and advertising.
      Influences that affected supply and demand in the simulation were the demand for two-bedroom apartments, the number of available people to rent two-bedroom apartments, the number of available two-bedroom apartments to rent, and the price of the two-bedroom apartments.   In the simulation, when the price of the two-bedroom apartments is temporarily lowered the demand for the two-bedroom apartments increased.   By GoodLife not lowering the rent low enough to rent all the two-bedroom apartments, GoodLife maintained a surplus of available apartments for rent. Any surplus of apartments that are available can cause the rental prices to go down.   This is known as a downward slope.   When there is a shortage of apartments to rent GoodLife will increase the rental prices of their two-bedroom apartments.   This is known as an upward slope.   GoodLife needs to maintain a balance between the number of two-bedroom apartments supplied and the number demanded.   This will maximize GoodLifes’ profit margins.
      A population increase as the scenario showed when Lintech Inc. arrived in Atlantis, there was a higher demand for two-bedroom apartments but there was no increase in supply.   This showed the demand curve shifting.   The demand increase of two-bedroom apartments is more than the number of apartments supplied at the original price.   This means GoodLife did not want to rent the two-bedroom apartments at the original price causing a shortage of...