Running head: SUPPLY AND DEMAND CONCEPTS 1

Jon Barnard

Supply and demand concepts

ECO/365

June 12, 2014

Bryon Apo
Supply and Demand Concepts 2

Supply and Demand Concepts

Economics are the building blocks on understanding business on a financial standpoint

and the adjustment curves in supply and demand. To understand this more this paper will go into

key concepts that microeconomics and macroeconomics can deliver. This will be supported with

examples as this paper Identifies two microeconomics and two macroeconomics principles or

concepts from a simulation that was done prior to writing this paper. I will explain why I

categorized these principles or concepts as microeconomics or macroeconomics. Then this paper

will identify at least one shift of the supply curve and one shift of the demand curve in the

simulation following what causes these shifts and the supporting factors of the shift? I will share

examples, as they relate to my work presently and how it will help me understand the factors that

affect shifts in supply and demand on equilibrium prince and quantity.

Definitions

To better understand economics it would be best to know what both micro and

macroeconomics mean. Microeconomics is the emphases of the marketplace factors of demand

and supply, which normally determines the change of levels in price. This is the part of

economics that features particular factors of individual choices. Like change in microeconomics,

macroeconomics is the focused area of economic development and changes in general income.

This is the broader spectrum of change through factors of everyone decisions as this is used to

determent the change in supply and demand. Identified shifts In the simulation that was used to

help better understand economics and generate this paper incorporated a shift of supply and

demand. The shift of supply in the simulation demonstrated the amount of supply grew once

leasing rates increased. This is a tactic used in the expectation of a shift in quantity of apartments
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availability, which was a curve shift to the left. With the curve of demand quantity of housing

was demanded after rates decreased. This was the result of a change in population causing a

demand shift to the right. Thus the shifts of supply and demand are known ways to most

affectively dictate profit through the curves of supply and demand.

Analyzing shifts/ macro and micro

Each change in shift affects equilibrium of price, quantity, and consuming behaviors.

Concepts of microeconomics and macroeconomics help to gage factors that affect these shifts in

supply and demand, which in result helps to understand why the change in price, quantity and

consuming behaviors. The shift of demand is caused by factors that are mainly determined

through presented circumstances and behaviors of consumers. The shift in demand can relate to

microeconomics easily as behavior is a big factor. The demand for product or service originates

from individual desire as microeconomics places plenty emphasis on. Supply shift is also

comparable to the shift on demand but with vast factors outside of consumer behavior. The

supply shift is the based off the overall obtainability of a given product of service. Obtained

through the study of macroeconomics if a given product supply is at a scarcity then the price will

go up mostly when the demand is high, if the demand of the same product is low and the supply

is high companies may reconsider their pricing to get rid of their surplus. The markets of

products and services are in constant fluctuation due to the supply and demand, which is covered

in both micro and macroeconomics. Workplace similarities in the workplace that I call home

there is a demand for graphic designers and a minimum amount of designers. This allows

designers like myself more space to play regarding higher pricing. Their are average rates that

are looked at from the pass but due to the demand back then at a all time low the pricing may

increases for the demand is grater and the supply is still at a minimal.
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Elasticity of demand

When looking at the price elasticity of demand the question that comes to the turf is how

important does the price play on the consuming behavior of a giving product or service in the

market. This refers to a product or service and its importance’s to have or not if so does a small

increase change the decision making of consuming? Factors regarding the elasticity of demand in

price are the available substitute and time, price to beget ratio, and necessity or luxury. If their

were no available hydrating liquid besides bottled water for free the price of bottled water would

be able to rise and not influence the decision to buy it due to its necessity and this is referred to

as an inelastic product. On the contrary, today’s form of hydrating is easily accessible, normally

cheap and sometimes free thus a small price increase in a bottle of water may affect consuming

behavior and this is referred to as an elastic product. This relates to the property management

firm within the simulation because the product they are offering is considered a necessity.

Having a home is needed but due to competition, price, location, and budget plays a very big

factor still. The pricing strategy in certain parts of the simulation presented related affecting

components such as timing as properties was close to highways making travel convenient for this

may be important to consumers in that area. Factors of such turns this property into good and the

flux in price may not mean anything in the eye of the consumer.

Conclusion

In conclusion this paper talked about the shift curve in supply and demand regarding the

simulation that was done to aid this paper. Thereafter enclosed brief definitions of

macroeconomics and microeconomics and how they related to each curve shift in the supply and

demand of the simulation. I then provided an example on how the supply and demand curve

relate to my line of work today. Lastly this paper then explained price elasticity of demand and
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the affects on pricing strategy used by the property-managing firm in the simulation. Hopefully

this paper delivered adequate amount of enjoyable material to arouse a desire to dig deeper into

economics.
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References

David C. Colander. (2013). Economics and Economic Reasoning. Retrieved from David C.

Colander, ECO/365 website.

University of Phoenix. (2013). Applying Supply and Demand Concepts [Multimedia]. Retrieved

from University of Phoenix, eco/365 website.