Analyzing Supply of Demand Simulation

Analyzing cut of Demand Simulation ECO/365 January 31, 2010 Analyzing Supply of Demand Simulation Supply and want is a signifi can buoyt element of business procedures thus this musical theme will evaluate how cater and pauperism excises a business via a wile provided by the University of Phoenix. In this paper, I will talk intimately the reasons for swaps that clear in cater and take in. I will talk ab forbidden how shifts in supply and demand function the organizations purpose making process as well.I will too dawn the four key points established within the reading assignments and how they relay to the simulation and how every theory can be related to situations in a workplace environment. This paper will establish how impairment elasticity of demand influences the finiss of the consumer and the organization. Changes in Supply and Demand There are quite a few factors that influence supply and demand in the simulation. These factors demand for the apartments, the handiness of the apartments, the damage of the apartments, the total of people or renters who are interested.According to the simulation, a demand curve is downward sloping. During the simulation, as the scathe of the apartments lowerd, demand for them increased. The supply curve, however, is sloping upwards. The number of two-bedroom apartments increased as the hurt increased. An excess in the perseverance for the apartments make use of downward demands on the price for the apartments. So therefore in order for GoodLife to attract renters, they would need to lower their prices. Shifts that instill Decision MakingThe different shifts in supply and demand affects decision making in several ways in regard to the simulation. In the simulation the changes that GoodLife were trying to make as well as the changes in the population of Atlantis had an effect on the supply and demand of the simulation. Since the renters changed their preferences, the demand for the apartments that Go odLife offered decreased. GoodLife accordingly decided to renovate the apartments and make them into condominiums that they could for sell. By doing this, GoodLife caused a decrease in the supply as well as a decrease in the demand.Given that, the supply and demand curve equally moved to the left. 4 Key Points Four key points in the simulation were supply and demand, symmetry, shifts in the supply and demand, and price ceilings. The simulation is based on supply and demand and is very helpful in understanding the different factors that can affect it. According to the simulation, a demand curve is downward sloping. According to our text, a demand curve illustrates how a change in the price aim will change aggregate expenditures on all goods and military services in an economy (Colander, 2010).In reference to the simulation, as the price for the apartments decreased, demand increased. The supply curve, on the other hand, is upward sloping. The number of two-bedroom apartments inc reased as the price increased. Equilibrium is a concept in which opposing dynamic forces call off each other out. In other words, equilibrium can be described as the position at which quantity demanded meet up with the supply that is presented. The quantity demanded will surpass the quantity supplied which can perhaps preface to shortages, if prices are below the equilibrium point.At this point, the prices moderate a tendency to rise in order to increase the supply until the equilibrium is met. A shift in the demand curve can occur because of a change in the income, a change in the price or a change in tastes. A shift in the supply curve can because of change in the costs of production, a change in technology, or a change in price of goods. A price ceiling takes place when the government places a reasoned limit on how high the price of a product can be. In order for a price ceiling to be successful, it must(prenominal) be put below the market equilibrium.Applying Simulation to Workplace The tint of supply and demand changes can have a big influence over the software industry. The technology involved in the software industry never really stays at the same level because technologies continuously change. However, if you were to take a closer look at things, computers and software grow about every six months to a year and half thence the reason technology is the constant factor that prompts change in the software industry. Elasticity of Demand outlay elasticity of demand refers to the way prices change in correlation to the demand. pot with lower incomes are inclined to have lower price elasticity because they have less money to spend. People with a higher(prenominal) income are inclined to have higher price elasticity since he can afford to spend more money. In both cases, ability to pay is negotiated by the intrinsic value of what is existence sold. If the thing being sold is in high demand, even a consumer with low price elasticity is usually willi ng to pay higher prices (WiseGeek,2010). Basically, goods or services presented at a lower price lead to a demand for greater quantity.Price elasticity of demand also explains that price becomes more elastic, because consumers can always choose to buy a good or service that is cheaper, in this case, prices will change with demand. In addition to this, completion for a certain good or service can also affect price elasticity of demand because it keeps prices lower. In summary, according to the simulation process, the demand curve is sloping downward, which causes the quantity demand to increase as the price decreases. The suggestion was for the management company to decrease its rental rates, which would therefore increase the demands for apartments.The supply curve is sloping upward, so therefore the quantity supplied increases as the price decreases. As stated, the quantity demanded balances out the quantity supplied at the equilibrium point. Nevertheless, when prices are below equ ilibrium, the quantity demanded surpasses the quantity supplied. In retrospect, when prices are above equilibrium, quantity supplied exceeds the quantity demanded, which cause an excess. References 1) WiseGeek. (2010). What is Price Elasticity of Demand?. Retrieved from http//www. wisegeek. com/what-is-price-elasticity-of-demand. htm