Essay about Eco/365 Supply and Demand

863 WordsNov 18, 20124 Pages
Supply and Demand ECO/365 Supply and Demand The economy is run by the concept of supply and demand. The simulation provided a practical learning experience that brings together the concept of micro and macro economics. I will try to summarize my findings and the inner workings of the concept of supply and demand that the simulation offered. Economics is defined as “the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of society” (Colander, D.C., 2010). In other words, economics focuses mainly on three aspects and those are: what are we going to produce, and how much of it are we going to produce, in what way are we going to…show more content…
Whereas if they paid a higher rent in Atlantis to Goodlife they would have a shorter commute and more time for the things they enjoyed. Then there is in macroeconomics what is considered the invisible hand a silent force if you will. Goodlife could do one of two things it could lower its prices to entice customers to rent its vacancies as opposed to renting outside Atlantis. Or, if Goodlife were renting their apartments then they could raise their price because there were fewer to rent from in the city. This is known as the invisible hand theory that “gives more power to the supplier of something that is in short supply” (Colander, D.C., 2010). This theory says that I there is less apartments and more interested customers that Goodlife could raise its prices because of the demand for them. Goodlife needed to have a 15% vacancy in the simulation, and this would represent a shift in the demand curve. For Goodlife to do this it had to lower its apartment rental prices, and thereby increasing the demand for apartments. On the other hand, Goodlife was able to supply more apartments when it raised its prices to cover maintenance fees by charging $1,550 a month. The housing market in my area of Texas has continued to drop because of such a large supply of housing. The demand for housing is at a current low. Once customers start to purchase homes in the area prices will stay the same and prices will steadily increase as the supply lessens. In

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