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Supply And Demand Simulation Essay

901 words - 4 pages

Supply and Demand Simulation
Justin Valence
ECO 365
Mar 18, 2013
Roger Hinds

Supply and Demand Simulation
Microeconomics affect everyday lives in ways we do not necessarily see. Take for example the supply and demand simulation. This simulation was a good way to determine first hand how certain circumstances change the supply and demand and how it affects prices of two-bedroom apartments. Circumstances such as inflation, unemployment, and the ability to produce more product or outcome are all aspects of macroeconomics that economists look at to determine or recommend changes to ensure a healthy economy. On the other hand, microeconomics economists study more the supply and ...view middle of the document...

The change to the supply curve would normally cause a shortage in supply, and demand would increase, thus allowing GoodLife to raise the prices. The decrease in demand without change to the supply would decrease prices because of a surplus of supply. However, because demand and supply decreased due to a change in preference and loss of rental units, both curves moved towards the right. This move means that the demand decreased as well as the supply, and to keep the equilibrium of rental properties, GoodLife would have to decrease their prices in order to keep the consumer renting apartments instead of buying a condominium.
This is actually very similar to a current product that has risen in demand. Ammunition in the United States is hard to find because of the increase in demand due to the government’s talk about gun laws and restrictions. This being more of a macroeconomic shift, it really does not have to do with the individual consumer but the population as a whole who are afraid of gun laws being tighter. Since demand increased due to this, prices also raised up to match the demand. Another example would be the AR-15 model assault rifle. Due to current events, the government is contemplating restricting the ownership of these rifles. However, because nothing has been passed yet, the population is trying to purchase these before they become illegal to purchase. So prices for rifles doubled overnight when this news hit the media.
These current events have shown me the true nature of microeconomics and how different circumstances can change the preference of the population and how it affects prices and the supply available. Supply and...

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