Introduction
The Supply and Demand simulation involves acting as Property Manager for GoodLife Management, a property management firm that manages apartment complexes in Atlantis. This simulation was an exercise in applying the supply and demand concepts based on current market trends. The property manager is required to adjust the monthly rental rate of two-bedroom rental apartments and number of apartments available. Supply and demand within the simulation were manipulated by the rates charged for the rentals, the economy, income, and personal choice. All of these characteristics affect the proportion of vacant as well as occupied apartments.
Simulations
In the beginning of the simulation GoodLife Management held the monopoly in
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The manager lowered the monthly rental rate in an effort to decrease the surplus of available apartments on the market in order to create equilibrium to the supply and demand of the apartments. The lack of apartments becomes a smaller number as the rental rate increases; the result is a decrease in the quantity demand and an increase in the quantity supplied. When both quantity demanded and quantities supplied are equal there is no requirement for the rental rate or number of apartments to change and the market is thought to be in equilibrium (UoP, 2008).
In the next section of the simulation the property manager for GoodLife Management was faced with shaping the course of action in the demand and supply curves when a new company set up office in Atlantis. The new company increased the cities population therefore increased the demand for apartments with temporary month-to-month leases. The increase in residents placed a demand on apartments, but did not affect the supply of the apartments, therefore, the demand curve shifts to the right. Rental rates are increased, as the demand for apartments is greater than the quantity of apartments supplied. Because rates are increased, demand decreases and supply increases leading to a reduction in the apartment shortage. Equilibrium is reached when rental rates and supply increases at the same time
This is a result of a demand shift to the left related to a lack of available tenants for the apartments. The property management company has to decrease rental rates allowing the quantity supplied to decrease as well (University of Phoenix, 2012), creating a downward swing in the supply curve. The price of rentals decreased to create less quantity that is available for rent creating equilibrium and a decrease in surplus. This is a difficult decision to lower price significantly but will continue to create revenue for the property management company while decreasing supply of vacancy.
Seven hundred and twenty of the people of E-editors are obese, which indicates risk of hypertension, diabetes, cardiovascular diseases and high cholesterol
The price of rentals decreased to create less quantity that is available for rent creating an equilibrium and decrease in surplus. This is a hard decision to lower the price significantly but will continue to create revenue for the property management company while decreasing supply of vacancy.
Recent medical advances have greatly enhanced the ability to successfully transplant organs and tissue. Forty-five years ago the first successful kidney transplant was performed in the United States, followed twenty years later by the first heart transplant. Statistics from the United Network for Organ Sharing (ONOS) indicate that in 1998 a total of 20,961 transplants were performed in the United States. Although the number of transplants has risen sharply in recent years, the demand for organs far outweighs the supply. To date, more than 65,000 people are on the national organ transplant waiting list and about 4,000 of them will die this year- about 11 every day- while waiting for a chance to extend their life through organ donation
Apple juice and orange juice are substitutes for consumers, so the fall in the price of apple juice decreases the demand for orange juice. The demand curve for orange juice shifts leftward. The increase in the wage rate paid to orange grove workers raises the cost of producing orange juice. The supply of orange juice decreases and the supply curve of orange juice shifts leftward. The net effect of these events decreases the equilibrium quantity but has an undetermined effect on equilibrium price. If supply decreases by more than the demand, the shift in the
5. Market analysis with direct competitor in the region suggests that studio prices are at least 21% lower and one bedroom suite prices are at least 40% lower than the competition in the new pricing model. Comparison with the general market suggests similar findings.
The market price of a good is determined by both the supply and demand for it. In the world today supply and demand is perhaps one of the most fundamental principles that exists for economics and the backbone of a market economy. Supply is represented by how much the market can offer. The quantity supplied refers to the amount of a certain good that producers are willing to supply for a certain demand price. What determines this interconnection is how much of a good or service is supplied to the market or otherwise known as the supply relationship or supply schedule which is graphically represented by the supply curve. In demand the schedule is depicted graphically as the demand curve which represents the
Others causes are taxation structure for rental properties, increasing needs of population segments, regulations and process
The real estate based in Miami Beach, Florida is known to be an affordable market. The price of the properties in this area is below 300,000 USD. There is a common belief that the price of the houses in Miami Beach will be constant in case there is no big change. The price range is highly competitive and all the inventory will be sold out in the next two months. This stands to be the key reason as to why the buyers in Miami Beach come across stiff competition in conjunction with multiple offers. The real estate in Miami Beach holds everything for everyone which incorporates single-family houses as well as condos.
The existence of rent control apartments affect the market for non-rent-control apartments negatively. Rent control forces landlords to lease apartments at a level below the equilibrium. “If the government disrupts this equilibrium by setting a ceiling far below the market-clearing price, then it creates a shortage; that is, more people want to rent apartment units than landlords want to provide.” (Murphy, 2014). Thus, in cities with rent control, it is extremely difficult to find a place to stay. In cities without rent control “…the equilibrium rental price occurs where supply equals demand, and the market rate for an apartment perfectly matches tenants with available units.” (Murphy, 2014). Also cities without rent control experience a healthy
Different market decisions determine how an economy is run. There are several different factors that account for how markets make their decisions, which determines how they function. The theory of markets mostly depends on supply and demand. However, it is key to note that there is a difference in demand/supply and quantity demanded/supplied. A demand is how much the buyer plans to purchase at various markets prices and the quantity demanded is what the buyer actually purchases at a particular price. Supply is the producer or the seller’s plan of the amount the seller will make available at different market prices and the quantity supplied is the actual amount that the seller makes available at a particular market price. It is important to
“Real estate is land, all of the natural parts of land such as trees and water, and all permanently attached improvements such as fences and buildings. People use real estate for a wide variety of purposes, including retailing, offices, manufacturing, housing, ranching, farming, recreation, worship, and entertainment.” (Answers.com) In order to more specifically focus on a specific area of real estate this discussion will deal with the housing industry of real estate. In this discussion, when housing is analyzed it will be in the realm of rental real estate.
General market analysis has been conducted regarding the basic demographic data of population and employments trends, income, and age within the local trade areas respectively extending 1 and 3 miles out. Supply factors in real estate of a given trade area reflect the availability and vacancies of space, absorption rates and months of inventory of existing homes/units, and capture or market penetration rates of newly-constructed buildings.
An explanation of how decision-making is dealt with in economic analysis requires an examination of the main factors at play. These factors amongst others are looked at as a base for decision making. Supply and Demand are the most fundamental tools used in economic analysis. I will explain what demand is and how the demand curve is derived. I will also write about Supply and its relationship with Demand. I will examine equilibrium price (market clearing price) and how we can calculate or plot it. I will attempt to show how market surpluses and market shortages are caused and their effect on product prices. Factors of cost and the decisions regarding cost will be covered. I hope to covey how cost is correlated with price which in turn is
The proposed outline and logic of this report are as follows: firstly, the key influencing factors of demand will be identified. The region’s overall economic condition, office employment trends and net absorption are going to be considered. Secondly, various analytical strategies would be applied to further investigate the mechanism of the market. Then quantitative methods such as multiple linear regression would be drawn on to assess the effect of the