Supply and Demand Simulation Essay Example for Free

Supply and Demand Simulation EssaySupply and claim is considered a basic economic concept, as well as a vital part of a free merchandise economy. In whereas rendering is the amount of something, such as a harvesting or service, accept is the amount of the product or service that buyers want to purchase. The relationship between provision and demand has a good turn to of influence on the charge of goods and services. In the scenario, a number of factors, including price outgrowths or decreases, cause alter in supply and demand. For example, a decrease in the rental price of two roomed apartments caused an increase in the demand of houses by a significant margin. A rise in the population of Atlantis led to a greater demand for accommodate which in turn contributed to the rise in rental prices as demand-outstripped supply. As a consequence, the providers were eager to supply more units at improved rental prices. When the population decreased, the demand for housing fell and the available units were leased out at low prices. Naturally, the suppliers were not very keen to supply all their units to the market at depressed prices.Available substitutes affect the demand and supply of a commodity. A number of people in Atlantis owned homes in the suburbs and did not need to rent houses in the town. The demand for houses dropped and this forced the suppliers to cut back on supply or reduce rents in bid to appeal more clients. Consumer tastes and preferences affect the supply and demand of goods and services in the market When consumer trends translationed from two roomed apartments to detached houses, the shift in demand for apartments fell while the demand for detached houses rose. As a result, suppliers increased the supply of detached houses. Under free market conditions, a negative shift in demand results in lower quantities demanded and as such, suppliers are inclined to reduce supply. A positive shift in demand leads to a rise in quantities deman ded and a positive shift in supply as suppliers position themselves to take advantage of higher(prenominal) prices.As a supplier, the lower the price, the less I will supply to the market in a bid to push up prices when demand increases. With a risein demand, supplying more units to the market would make more profits by charging higher rents. The simulation focused on the following key points The equilibrium price and quantity, Shifts in demand, Shifts in supply, and Changes in price. The concepts of demand and supply, as demonstrated in the simulation, instruct one how to respond to changes due to shifts in market fundamentals. Whenever there is a change in demand due to any of the factors affecting it, an entrepreneur should be quick to respond appropriately to maintain ones share of the market. This may involve with child(p) of the price and a reduction in the number of units supplied. In the event that demand rises, the supplier should increase supply to realize higher profits from increased sales at higher prices.When government authorities impose price restrictions, a supplier should only supply that number of units that correspond to the restricted price as determined by the crossroad of the demand and supply curves. In regards to my results of the simulation, my vacancy rate was continuous 12 % that generated total revenues of $ 1.8 million. Battling the rise and demand, I opted for those rents that equaled the equilibrium price as determined by the intersection of the demand and supply curves. With the imposition of a price ceiling, I chose the quantity supplied that equaled that quantity determined by the intersection of the supply and demand curves at the predetermined price. The underlying criteria I adopted for deciding on a particular price was the concept of equilibrium I decided that the market forces of demand and supply are the best determinants of what is optimal for both producers and consumers.