Supply And Demand Simulation Analysis - 1189 Words

Supply and Demand Simulation The economy is a practice that relies on principles and concepts. The different focuses are based on a Macro and Micro perspective that creates the commercial and consumer environment. It is important to understand how these principles and concepts relate to the environment to create strategies that will, in return create profit and confident investments. The supply and demand simulation highlighted the important of just that from a commercial setting. Today’s housing economic atmosphere is a buyer’s market, but also the demand has shifted to renting. The simulation walked us through an apartment management company that is based in the city of Atlantis. The simulation highlighted the laws of supply and demand†¦show more content†¦For example, if the demand curve shifted to the left, it would decrease demand. The results would show fewer prospects for renting an apartment. The business would take a hit due to the decline in applicants looking to rent an apartmen t and in return will have to decrease prices to compensate for the demand and reset an equilibrium. The equilibrium price would ultimately drop to support the decreased demand, while supply stayed constant. If the supply curve shifted to the right, the visual will show an increase in apartments for rent. The two scenarios will show supply increase, one because demand decrease or an influx in supply creating more apartments for rent. The simulation shows that corporations need to be flexible and adjust to the economic environment. If they understand the problem, a successful solution can be created. One suggestions for the company should be a price decrease to adjust to the economic value, creating an affordable and competitive solution. The goal is to always increase or maintain gross profit. By reacting to the shift they were able to maintain prospects for their apartments and generating profits. The prices of the two bedroom apartments are a factor because of the demand of the apa rtments per unit during a specific timeframe and market conditions. To be strategic and maximize profits, Good Life management determined the amount of apartment units and use a pricing model to ensure they maximize profit. From a