Supply and Demand Concepts: Goodlife Management Company

In: Business and Management

Submitted By kbock01
Words 950
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Supply and Demand Concepts at Work: Goodlife Management Company
Microeconomics and Macroeconomics at Work
The two microeconomic concepts at work in the simulation were the law of demand and supply. According to the law of demand, more quantities of a product or service will be bought at lower prices than at higher. As the Goodlife Management Company lowered their rental rate, their vacancy rate decreased thus indicating there was an increase in demand as the prices were lowered. According to the law of supply, as the price of a product or service increases, supply of that product or service increases. As the Goodlife Management Company, raised their rental rates, they leased more apartments since they were valued at a higher price.
Shifts in the Supply and Demand Curve
There was a shift in the demand curve when Lintech Inc. moved their business into the city of Atlantis resulting in an increase in population and thus an increase in demand for Goodlife Management’s apartments. Due to the shift of demand for apartments due to the increase in population, the equilibrium price and quantity will also increase. Thus, Goodlife will lease more apartments at a higher price due to the increase in demand and equilibrium price.
There was a shift in the supply curve when Goodlife Management converted some of their two bedroom apartments into condominiums due to the sustained decrease in demand for apartments as the population’s income increased. Due to the shift of supply of apartments due to the decrease in demand, the equilibrium price increases but the quantity falls. Therefore, Goodlife Management must increase their rental rate in order to lease out more apartments.
Real World Application * Technology plays a huge role in our lives. We have to buy the newest game station or latest 60-inch, 3-D television. Understanding the laws of supply and demand can…...

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