Laws of Supply and Demand - 1244 Words

Microeconomics and the Laws of Supply and DemandECO/365October 13, 2014Professor CoulibalyComedian P.J. O’Rourke said it best when he said, â€Å"microeconomics concerns things that economists are specifically wrong about, while macroeconomics concerns things economists are wrong about generally. Or to be more technical, microeconomics is about money you don’t have, and macroeconomics is about money the government is out of† (Beggs, 2014). On a serious note however, macroeconomics and microeconomics are different from each other yet both play a crucial role. The Atlantis simulation gave a great example of the two important aspects of economics, microeconomics and macroeconomics. This simulation showed different scenarios and situations of†¦show more content†¦Their immediate response was to lower the rent and in doing so they raised the demand rate because it added to consumers desire to move into apartments with lower rental costs. As the demand for the lower rental costs rises, the vacancy rate or the supply decreased. As the number of available apartments increases, the supply curve shifts right. As the rental rate increases, the supply also increases. By leasing all 2,500 apartments, the rental rate will be pushed to $1,500. The demand curve begins to shift down as the rental rate and supply of apartments increase. If Goodlife increases their rental rate to the $1,500, the demand for the apartments will decrease. To reach the equilibrium Goodlife must decrease the rental rate to $1,050 and in so doing the number of demanded units and the number of supplied units will be equal. In applying this to my workplace, supply and demand is based on the number of students brought into the system every other week. Most times we expect to get six to eight new students every fourteen days. If that number goes up we have to order more goods to take care of the increase. On the other hand if that number decreases we have to order fewer goods. Also, with fewer students we need fewer staff to take care of those students. In microeconomics, the market supply and demand rely on competitors and prices. Market equilibrium is one of the most important concepts in the study of economics. â€Å"Market equilibrium is a market state where theShow MoreRelatedThe Law Of Supply And Demand880 Words   |  4 PagesThe law of supply and demand describes how prices will vary based on the balance between the supply of a product and the demand for that product (Wikipedia, 2005). If there is a balance between the supply, (the availability of the product), and the demand, (how much product the consumers want), then the price for the product would be considered good. If there is an imbalance, the price will change. According to Adam Smith, the invisible hand is a self-adjusting force in the market that corrects theRead MoreThe Law Of Supply And Demand980 Words   |  4 Pages What is the law of supply and demand? They are theories explaining an interaction between the supply of a source and a demand for that resource. The law of supply and demand defines the availability of a particular product and the demand for that product has on the price. If there is a lower supply and a higher demand, the price will be high, but the greater the supply and lower the demand, the lower the price will be for the product. This is an environment where buyers and sellers interact to exchangeRead MoreThe Law of Supply and Demand1829 Words   |  8 PagesA market is an environment where buyers and sellers interact to exchange goods, the price for which are determined by both the supply and demand for them. ‘A market uses prices to reconcile decisions about consumption and production’. ¹ The supply/demand model helps to explain how the market works and gives a greater understanding of actual market behaviour. Therefore, analysis of this concept can be used to develop economic and business decisions and policies. The purpose of this assignment isRead MoreEconomics, The Law Of Supply And Demand1553 Words   |  7 PagesIn economics, the law of supply and demand is a fundamental tool of economic analysis used to study issues as diverse as inflation and unemployment, the effects of taxes on prices, government regulation of business, and environmental protection. In order to show how prices and quantities are determined in free markets, economists must refer to supply and demand curves. Every market consists of both buyers and sellers. For without buyers and sellers an economy would not be able to function and inRead MoreMicroeconomics And The Laws Of Supply And Demand Essay937 Words   |  4 Pages Microeconomics and the Laws of Supply and Demand Microeconomics and the Law of Demand as reviewed in the Khan Academy videos are a simple enlightening of the business cycle. The descriptive teaching and evolving facts of real life cause and effects in the cycle of business production and supply are an exquisite piece of material. The concepts relation to microeconomics are demand, markets cost and price, they are listed in true relation to the area’s they occupy in analysis of the mathematical formulaRead MoreLaws Of Supply And Demand In Economics1164 Words   |  5 Pageselevates in price just the beginning of a rise in gasoline prices until repairs are consummated or a replication to price gouging? For some economics this remains to be unseen. The laws of supply and demand have yet to assert themselves in the hardest hit areas of Florida and Texas. This ties directly into the laws of demand. Let’s use produce as an example. A rudimentary consumer has been culled and is shown an appealing exhibit of heads of lettuce. If the price of lettuce were zero, the consumerRead MoreMicroeconomics And The Laws Of Supply And Demand900 Words   |  4 PagesMicroeconomics and the Laws of Supply and Demand There are a diversity of aspects that can sway changes in supply and demand. These aspects include price increases or reductions. An instance is a nominal reduction in an asking rental price can result in a significant growth in necessity for houses. To a similar effect, an growth in the rental cost of two-roomed apartments consequentially resulted in a reduction in the demand of houses by a material measure. Providers were willing to supply more houses atRead MoreEffect Of The Law Of Supply And Demand1798 Words   |  8 PagesThe effect of the law of supply and demand is clearly demonstrated in the news article titled â€Å"Gas prices go below $3† (Isidore, 2014) which is closely related to the article â€Å"Oil prices are plunging. Don t cheer yet† (Egan, 2014). We begin by analysing the supply of gasoline, which has been increased by several supply shifters. One of the factors is the increase in capacity of existing oil refineries, which produce petroleum (EIA, 2013 ). Another aspect is the improvements of refining technologiesRead MoreThe Law of Supply and Demand Questionnaire1718 Words   |  7 PagesQuestion 1. a. Draw the total supply and demand curves for apartments in this city, and show the equilibrium and quantity traded. Equilibrium = 430 x 130 Quantity traded = 560 apartments at  £130 000. b. Calculate the price elasticity of demand for apartments at the equilibrium price. PED = 7.5% (Change in quantity demanded) / 8.3% (Change in price) = 0.8. c. Outline the factors that are likely to determine the price elasticity of demand for apartments in practice. 1. The percentage of incomeRead MoreMicroeconomics and the Laws of Supply and Demand Essay703 Words   |  3 Pagesï » ¿ Microeconomics and the Laws of Supply and Demand ECO/365 Principles of Microeconomics August 18, 2014 Sam Pirnazar Microeconomics and the Laws of Supply and Demand Abstract The objective of the laws and the supply and demand simulation is to apply the supply and demand concepts to provide a better understanding on how to use the curves in order to figure out the equilibrium in the market for leasing two bedroom apartments. The simulation