Supply and Demand Simulation
There are several factors that may affect the demand and supply curves and shift them to the right or to the left accordingly, with the respective consequences.
If we look at the demand curve first, perhaps the most important factor that causes a shift is the customers' preference or taste. For example, we may consider wheat as a product. The customers decide that wheat is not as healthy as rye and will begin to buy more rye bread than white wheat bread. In this case, the aggregate demand curve for wheat will suffer a shift leftwards. The consequences are that the equilibrium price, on a given supply curve will be lower than previously. Hence, a wheat producer or a company that commercializes wheat will probably lower its prices in order to regain some of the market share that has been lost due to consumer taste. Other factors that influence shifts in the demand curve are the customers' income or the prices for substitute and complementary goods. Following our example, if the customers' income will decrease, then it is probable that they will be buying the cheaper rye bread instead of wheat bread (assuming that rye is indeed cheaper than wheat). Hence, a new shift to the left. As for substitute goods, rye is indeed a substitute good for wheat: you can choose one or the other. A drop in rye prices will shift the aggregate demand curve for wheat leftwards, similarly as an increase in the price of rye will shift it to the right, because people will tend to turn to wheat as a cheaper product.
Much the same, the aggregate supply curve will shift to the right or to the left if there is "a change in costs, a change in the number of goods in competitive or joint supply or some unforeseen event which affects production." In all cases, one needs to change the price...
Supply Demand Simulation Macro and Microeconomic Principles From the simulation, the two major microeconomic principles are supply and demand. The simulation majorly focuses on the supply and demand of rental properties in Atlantis. In addition, the influences on supply and demand form the major topic discussed in the simulation. The macroeconomic factors clearly stated in the simulation are changes in the population trend, choosing to rent or buy apartments and factors that
This means that the demand increase will produce an increase in supply at a controlled rate. d. How can you apply what you learned about the concepts of supply and demand from the simulation to your workplace? The simulation sheds particular light on the idea of adjusting pricing structure according to apparent market demand. This is useful to any workplace. In my case, the notion that large-scale external changes in the
ordering strategy is fairly simple, and this is why there were seldom backlogs. Basically, what you want to do is understand the baseline demand. In the real world, we would probably already have this data, but in the simulation we needed to figure that out. So most of the order backlogs occurred initially, and during promotion, when nobody was really certain of demand. Once it was established that demand
Economics The supply and demand simulation featured a number of different economic prniciples at work. In terms of microeconomic principles, two that were featured prominently was the relationship between supply and demand. The impact of these two variables on the price and availability of apartments in Atlantis was at the core of the simulation. Another was price elasticity of demand. There were also some macroeconomic principles outlined, as they affect supply
(Reza, 2009) This information is building off of the findings from Uthayakumar. This is illustrating how the two tier system can help to streamline operations. However, as time goes by these ideas will become obsolete. The reason why is because they are focusing on particular aspect of supply chain management (i.e. during emergencies and backlogs). Where is it is failing, is through understanding how this strategy could be used when
The apartment management company prices to cover costs. However, if there is scarcity in the market, the company can earn superior rents, leading to higher profit. The interest is related to the cost of doing business, if the landlord has leveraged in order to acquire the property. d. In my workplace, supply and demand work much the same as in the simulation, albeit with different demand and supplier drivers. We
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now