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Abstract The simulation titled Applying Supply and Demand Concepts was an exercise in evaluating the way that supply and demand affect each other and change the curve and direction of the slope while keeping balance or equilibrium The task was to complete the scenarios and evaluate how the changes in the demand and supply changed the way the company did business The final task was to find a way that this information can be of use in my place of work Supply and Demand Simulation Introduction In the simulation Applying Supply and Demand Concepts the regional property manager Hal Morgan of Good Life Management wants to increase the demand for their two-bedroom temporary month-to-month rental rates in Atlantis The supply and demand shifts during the seven year period used in the simulation I will be discussing the changes that occur and how that will affect the balance in the supply and demand curves Scenario One There are several changes in the supply and demand shown and causes for each In the first year the rental rate must be reduced to increase the demand even though Good life Management holds a monopoly in this area To do this we need to lower the rental rate to 105000 a month This brings the occupancy rate down from 28 to 15 and income will be at 179 million dollars The apartments demanded now rises to 1700 as the price of the two-bedroom apartments fall to the rate of 105000 with a surplus of 300 Scenario Two Scenario two has Hal Morgan of Good Life Management wanting to increase the current rental rate from 110000 to 155000 a month At the current rental rate it is not profitable to rent out all apartments with the maintenance costs that will accrue To lease out all 2500 apartments and still make a profit the apartments need to be rented at a much higher rate This increases the supply curve
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