Basic Concepts

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Basic Concepts Paper Charles Lloyd Eco/415 October 19, 2012 George Flemming Basic Concepts Paper Circumstances, which are different, can have a major affect on supply and demand. The simulation in this week’s assignment deals with the curves of supply and demand and how they are affected by the changing of situations that happens in the city of Atlantis with the two-bedroom apartments. Changes were supposed to be made depending on the findings and results made within the Atlantis community. The shifts in supply and demand will have an effect on the Goodlife decisions. This simulation has four emphasized key points they are price ceilings, supply and demand, shifts in supply and demand, and equilibrium. This paper will summarize…show more content…
One example was that the price ceiling went into effect, which caused the rate not to increase or decrease. The team’s decisions were successful in some aspects and not so successful in other situations. In the simulation some of the team decisions led to financial success by selling each apartment at the appropriate price; whereas, this allowed everyone to win and make a profit. Some mistakes that the team made in the simulation was trying to make an affordable apartment rent for the tenants. When this decision was made the apartment management lost money by selling the places so cheap, and the management team had more tenants than apartments. The price lessoned so more people wanted to move in and there were no vacancies. The company had some fixed and variable costs associated within the simulation. Fixed cost is the business world ball and chain. Fixed costs are always paid it never change because of activity. At one point in the simulation the population increased and the amount of apartments for lease rose to 3,000 from 2,500, which caused an increase in demand, and a supply decrease. When the sales price of an item decreases it is common practice for a business to decrease the price also to entice the consumers to buy the cheaper priced products. A product in high demand must be sold at full price by the company for maximized profit. Another example occurred when the price cap was set the tenants would have to pay the same amount of rent

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