Supply and Demand Simulation Assignment Research Paper

Supply and Demand Simulation Assignment - Research Paper Example The shift in the demand curve in the simulation may take place because of any determinant other than price; therefore, there may be a shift in the demand curve due to the availability of a supermarket or grocery store near the apartment because if people are not able to find a store for daily needs near to their homes, that would not encourage them to buy the apartment. Furthermore, if there is a change in the prices or the quality of the Oakridge Builders’ homes, then the consumers may buy those and not the Goodlife apartments. This shift would reduce the number of homes being sold to families and thus the curve would go below the equilibrium price level. The supply curve would mostly shift due to a technological innovation and thus if the Company is able to bring about some technological innovation in their homes, that is, make them more digitalized, have proper security systems inserted then consumers will be interested in purchasing them. This shift will cause an increase in the supply of homes to consumers and thus result in going above the equilibrium price level due to the want of more homes by consumers and possible lack of the equal amount of supply. From the simulation the supply and demand can be understood as follows; taking products made by Apple and Microsoft, they may be similar in terms of usage however are different in terms of technological innovation. In the same way, Goodlife apartments appeal to families more than the retail homes from Oakbridge thus providing a clear competition for Goodlife to dominate the market just like Apple does even though it produces more expensive products, but it has a certain unique selling price. The concepts of microeconomics help in understanding the factors that affect supply and demand shifts on the equilibrium price and quantity as they talk about the shifts on an individual level; for example, if in a household, an individual had to choose between buying tea or coffee as a preferred beverage, the p rices of the same would affect his personal choice. Furthermore, if there was a shortage of supply of one of them, he would go for the other and similarly, if there was an increase in the price of one, he would choose the other as a substitute. This would affect the demand and supply curves to move up and down affecting the equilibrium price levels as per the quantities. The concepts of macroeconomics on the other hand refer to an aggregate demand and aggregate supply which takes place on a market level taking into account the personal needs and choices of all the consumers in a given area. Thus, from the point of view of households as well as firms, the factors that affects the shifts in demand and supply curves in macroeconomics may be understood by looking at the aggregate equilibrium price and quantity levels. Price elasticity helps in understanding how an individual’s demand can be lowered or increased by fixing a certain price for a particular commodity. As seen in the simulation, when the prices for the apartments are lowered, the demand for the same will be higher. At a higher price however, the demand will remain consistent for the group of people belonging to the category that can afford the apartment. At this point, the supply of the number of apartments is not taken into consideration to determine where the price of a single apartment will be set. The main