Supply and Demand Essay
Supply and Demand
Identify two microeconomics and two macroeconomics principles or concepts from the simulation. Explain why you have categorized these principles or concepts as macroeconomic or microeconomic. The microeconomic topics would be the demand and supply curve. The demand curve shows how consumers would react to prices. The supply curve shows how landlords would react to price by how much units will sell. The outside company coming in and the price cap would fall under macroeconomic. They show what will happen with outsides forces on the supply and demand curves. Identify at least one shift of the supply curve and one shift of the demand curve in the simulation. What causes the shifts? There are two shifts in the simulation. The first shift shown was the demand curve, and this was related to prices. As the prices of the apartments move up the numbers of tenants move up. As the price of the apartment go up there are less willing to rent and therefore the curve moves to the left. The supply curve is moved by how many units the company wants to lease out. The more units sold than the more money the rental company will charge. For each
Need essay sample on "Supply and Demand"? We will write a custom essay sample specifically for you for only $ 13.90/page
The shift of the demand curve is affected by the price of the units sold. The higher the price the more to the upwards that the curve will follow and there will be more units vacant and less money made. Lower prices will lead to a lower vacant rate. This will lead to a high profit in the short term but will eat profits if the price is too low. The supply curve is moved by the number of units offered and how much the company is willing to lease each unit. As more units are occupied this will lead to a higher demand and therefore the company can raise the price. The rental company has to find a point where the supply curve meets the demand point where the price is low enough for renters but high enough for profits. How may you apply what you learned about supply and demand from the simulation to your workplace or your understanding of a real-world product with which you are familiar? The workplace that work for is the county of Fresno. I am an account clerk in the revenue collection unit, and we collect on debts owed to the different departments within the county. We have the people who pay the debts they owe when they get sent a bill, and a collector is not needed. We have collectors who take calls from people who wants to find why they owe money and people who want to dispute it.
The county wants to collect as much money owed to the government as possible. There are six collectors in the office that handles the accounts. The county could hire more collectors but they know that at a certain point that people are not going to pay or the amount is just not worth the effort to collect. The cost of new employee will outstrip any gains but any less, there will more money not collected that could be. How do the concepts of microeconomics help you understand the factors that affect shifts in supply and demand on the equilibrium price and quantity? The concepts of microeconomics can me understand the factors that affect shifts in supply and demand by looking at the price and demand of a product. It can be determined in an area that a product will be sold to a certain amount of people for a set price. Some markets will support a high price and others will support a lower price. The return of debts owed at my job will change, depending on the supply of collectors. Factors could be number of collectors, methods authorized, number of account clerks, and resources provided by upper management. How do the concepts of macroeconomics help you understand the factors that affect shifts in supply and demand on the equilibrium price and quantity? The concepts of macroeconomics can explain how the greater factors influence a market. The stimulation showed what would happen if outside companies came into town. The influx of people due to because of development had an impact on the demand and supply curves. My job in the county could be impacted by factors outside the county, such as the state of the economy. During bad times there are more people who will default and therefore more accounts to collect. This leads to a need for more collectors, but the county may not be able to since because their budget is strained.
The county has to determine what is acceptable number to go after much needed money without spending to much. Relating to the simulation, explain how the price elasticity of demand affects a consumer’s purchasing and the firm’s pricing strategy. The price of apartments will affect how much consumers are willing to pay and how much profit the firm is willing to give up. As the price of apartments goes down the demand of consumers will increase. The average consumer will be willing to pay a lower price because it will lead to more money for them. The higher the price goes the less willing or able that consumers can afford apartments, but the firm will make more money to a point where there are too many empty units.