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Supply, Demand, and Price. Supply, Demand, and Price Supply and Demand
are the two most used words in economics. When there is a ...
Supply and Demand Simulation. ... Factors that influence the supply and demand for
apartments include personal preferences, economy, income, and rental rates. ...
Supply Demand Price. ... So the demand fluctuates based on the price of the product which
is very important correlation in the triangle of supply demand and price. ...
Supply, Demand and Price. ... Conclusion Supply and demand is one of the most fundamental
concepts of economics, and is the backbone of a market economy. ...
Supply and Demand. The ... An interesting supply demand scenario is unfolding
in the small town of Sheridan that I live in. Recently ...
Submitted by sugar1979 on April 1, 2008
Category: Business
Words: 914 | Pages: 4
Views: 258
Popularity Rank: 45,374
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Supply and Demand of Rental Properties in Atlantis
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GoodLife Management is a company that is located in Atlantis (fictitious town). This company rents two-bedroom apartments on a month-to-month basis to the people living in Atlantis. In the simulation, it identifies the change in supply and demand of GoodLife’s rentals which are GoodLife’s management direction, population changes, implementation of price ceilings, and changes in consumer’s preferences. Several key points were mentioned in the simulation such as the demand and supply curve, equilibrium, and the impact of price ceiling. This paper will discuss the key points mentioned above and summarize the results of the simulation (University of Phoenix, 2008).
The first section of the simulation begins with the vacancy rate of two-bedroom apartments on temporary and month-to-month lease in Atlantis which is currently at 28%. The requirement in this section is to decrease the vacancy rate to 15% while maximizing revenue (University of Phoenix, 2008). The rental rate must be decreased to stimulate an increase in demand which employed Law of Demand application. Colander (2004) defines Law of Demand as “Quantity demanded rises as price falls, other things constant (p. 91, chap. 4).” The rentals for each apartment were decreased to $950 at which 1,900 apartments were demanded and thus leaving the surplus of 100. This maximizes the revenue to $1.81 million and the vacancy rate to result at 5% (University of Phoenix, 2008).
The second section of the simulation explored the impact of leasing out 2,500 apartments which employed the Law of Supply application. Colander (2004) defines Law of Supply as “Quantity supplied rises as price raises, other things constant (p. 97, chap 4).” The 2,500 apartment’s rental rate will increase in order to be leased. In this scenario, the adjusted rental rate becomes $1, 550 per month for an apartment (University of Phoenix, 2008).
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