Microeconomics and the Laws of Supply and Demand Essay

Macroeconomics focuses on the entire economy date micro economics studies the individual characteristics and peoples within the economy. Both the fourth and one-seventh scenarios in the simulation were examples of macroeconomics. They illustrated examples that display the economy as a whole. For example, the impact changes were caused by an increase in the population and a change in consumer get. The front and second scenarios were examples of microeconomics as they illustrated actions and decisions of individuals and businesses. Whenever the managers created get down or high bell points for rentals they affected the picture and subscribe to curves.As the summary at the culmination of the simulation states, the supply and demand curve is not static mingled factors cause them to increase or decrease. For instance, in the simulation at that place was a shift in the demand curve with changes in the rental judge for the apartments. The supply curve shifted downward as the de mand shifted upward with the changes in lower rental rate. More peculiar(prenominal)ally, when the rental rates take down to $1050 consumers began demanding to a greater extent apartments at that rate. The increase in demand led to lower vacancies and, thus, slight supplyThe equilibrium harm is the price that allows the supply to meet the detailed quantity of what is demanded. When there is deficit in the market place it put squelch on the price and increases the price. When there is a surplus in the market it exerts a downward pressure on the price and decreases and decreases the price. Surplus and shortage determines the rate of equilibrium.Applying what we learnedWorking for a tea supplier for the Los Angeles County and orange tree County, the littleons in the simulation really resonated with me. I started to think about the model up of pricing on our products and its effect on the supply and demand for our specific products. I began thinking about what factors are nec essary to meet the demands of our byplay without compromising positive revenues. By analyzing our current conditions and creating accurate supply and demand curves for our products I realized that our company can set prices at equilibrium. In the context of microeconomics, individual and business decisions are what create shifts in supply and demand on the equilibrium price and quantity.For example, when the managers for the apartments made decisions to have lower vacancies they had to lower the price on there month to month rentals. This change magnitude the demand while lowering the supply thereby creating a price that is closer to equilibrium. In the context of macroeconomics, population changes or things like unemployment rates would change the supply and demand. For example, when the unemployment rate is high there would be less demand for higher priced rental rates. This would, therefore, increase the supply. In other words, there would be a surplus in vacant apartments. Wit h a higher population rate there would be an increase in demand. at that place is a direct relationship between the prices of a product set by a firm to how much it will be demanded by the consumers. The price elasticity refers to these changes in demand as the price is lowered or raised. Therefore, the most essential question firms must ask first when determining a price points is, How many people will demand a certain product at what specific price? This does not take into consideration the supply held by a firm since it makes no difference to what is demanded based on the price.ReferencesColander, D. C. (2010). Economics (8th ed.). New York, NY McGraw-Hill.University of Phoenix. (2013). Economics for concern 1 Applying Supply and Demand Concepts. Retrieved on October 27, 2013.https//ecampus.phoenix.edu/secure/aapd/vendors/tata/UBAMsims/economics1/economic s1_supply_demand_simulation.html