Supply and Demand Simulation Paper
Week 2 Individual Assignment
February 25, 2013
Supply and Demand
The analysis will identify two microeconomics and two macroeconomics principles or concepts from the simulation, and explain why each principle or concept is in the category of macroeconomics or microeconomics. The analysis will identify at least one shift of the supply curve, and one shift of the demand curve from the simulation and what causes the shifts. The analysis will show for each shift, how it would affect the equilibrium price, quantity, and decision making. It will detail application to learned material about supply and demand from the simulation to workplace or real-world product. It will detail how concepts …show more content…
In the simulation the demand curve moves to the right because population increased but supply did not. The equilibrium price is $1400, and the quantity is 2350 apartments.
When the enlisted personnel retire from the military, this sometimes increases the population in several areas. This is especially true after September 11, and many people felt the need to enlist. When these enlisted personnel come home, this can cause demand curves because of the numerous people needing many items to set up households. This can cause shortages in these areas, and create production problems for extensive periods because of the lack of preparations.
The price elasticity of demand affects a consumer’s purchasing and the firm’s pricing strategy in relation to the simulation. “The price elasticity of demand is a measure in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price” according to dictionary (dictionary, 2013). This is evident within the entire simulation as the price changes appeared whenever it was necessary for the company to remain profitable and with the quantity of apartments available as well.
The analysis shows how the simulation works to help a person understand several concepts in both