Microeconomics and the Laws of Supply and Demand
Introduction of Micro and Macro Economics
Microeconomics and macroeconomics are used in order to help economists come to conclusions and the economy of a city, state, and country. Microeconomics is the study of the economic decisions and actions of individual people and companies according to the Merriam-Webster dictionary (Merriam-Webster, 2014). This practice is the study of economics on a small scale where macroeconomics will study the whole system (Merriam-Webster, 2014).
Principles and Concepts
The simulation provided for an in depth experience into an example of supply and demand in the housing market. GoodLife Management is the ...view middle of the document...
The population of Atlantis has experienced an increase in the economy which has changed the citizens focus towards permanent housing instead of apartment living. This choice has forced the market to adjust again lowering the demand on apartments forcing GoodLife Management to make changes because of the surplus in vacant apartments. This has forced a negative shift requiring GoodLife to convert apartments into condominiums for sale lowering the supply and balancing the price once again (University of Phoenix, 2003).
Real world applications.
Supply and demand go hand in hand in the resale world of business as the entire sales floor is based on donations. The pricing structures that are utilized are completely based on quantities donated versus quantity demanded. An example would be the Princess Di Beanie Baby, although this Beanie Baby is very rare and worth thousands of dollars to the right person there is no demand for this toy and therefore the price continues to drop until a buyer can be found. The cabinetry donated sells for hundreds of dollars but when the store is overflowing with cabinets because of a lack of demand, the price reduces to...