Supply and Demand Narrative Essay
In the ECO/365 course you are taken through a simulation, where you are asked to manage the supply and demand of two-bedroom apartments. The apartments are located in a city called Atlantis, which seems to be a very attractive place to live. The stimulation is used to provide the learner with real-life situation of how the pricing of a good or service (price ceiling) can affect the quantity demand, and the quality supplied. Throughout the simulation the learner is asked to price the rate of the two-bedroom unit. And based on the rate, you are given the results of your actions, and how it affected the market.
Through this simulation there were examples of microeconomics such as the government imposing a ceiling cap on monthly rental rates. To ensure the affordability for middle class workers also. In addition to GoodLife management deciding to offer month to month lease, and lower their rental price. In microeconomics you learn that decisions by both firms and individuals are motivated by cost and benefit considerations. Costs can be either in terms of financial cost such as average fixed costs and total variable cost (economics. about.com).
We learned that macroeconomics deals with the structure and decision making of the economy as a whole (Colander, D. C. 2010). I think it is only fitting that I mention that all though most everything was consistent. However, we did see that the lower the rate of the apartment, the more of a demand. One shift in the demand curve is the availability of the two bedroom units was in high demand. In part to the price declining and there being available renters. However, in the beginning as the apartments increase, so did the price.
As we notice in the simulation when the rental demand is higher the price increases. However, when the quantity demands decrease, than there is an increase in the supply. This can potentially lead to a shortage. With my organization the supply and demand could be applied in various ways. Because my filed is healthcare a few things come to mind. Supply and demand in my health center is when we receive a grant for a specific service lets say long-term hormonal birth control method, so then we will purchase a surplus of that particular supply. Additionally we will bring in more staff, or budget for overtime.
In addition another way supply and demand can be applied is when a friend of mines decided to go into business of making signature drinks. Before you purchase a surplus of drinking cups, and liquor ensure that you have the demand. Do not increase the price because the demand is there right now. Utilize the skill of macroeconomics and see what is happening in your community or clientele you are trying to reach. The concepts learned about microeconomics that will help me understand the factors that affect shifts in supply and demands are based on the competition and their prices.
Than once everything is balanced you have equilibrium. However, I tend to get a little confused with both concepts, so I hope that I am explaining this correctly. Lastly you have macroeconomics which shows what happens to the market when the increase or decrease of careers, and populations affects the real estate market. With the equilibrium apartment demand and supply is increase, which makes the rental rates higher. Summarizing the Supply and Demand simulation on the demand and how it affects a consumers purchasing.
Happens a few different ways, when the demand for the apartments in Atlantis was high, the price increased. Then when the price for the apartments was lower, the demand was higher. However, once the price was increased it either stayed the same or decreased. Overall this simulation was very beneficial for me, I was able to utilize the tools I am learning in this course in real time. In addition to getting clarity on certain parts I was struggling in. Although I still have some ways to go, I am appreciative of this simulation.