Supply and Demand Simulation
The simulation "Applying Supply and Demand Concepts" deals with the supply and demand curves affected by different situations that happened with Goodlife's two bedroom apartments in the city of Atlantis. The simulation called for decisions to be made based on what was happening in the community of Atlantis and what Goodlife was trying to achieve economically as a result of the changes within the community. This paper will summarize each of the concepts found in the various scenarios and explain what caused the changes in supply and demand, how the changes in supply and demand ultimately affected the decisions that were made and relate the concepts of supply and demand to Aflac's Software Testing Services department.
During the first year of Goodlife's existence in Atlantis, the company wanted to see what monthly rental rate would have to be charged to ensure that the maximum revenue was received for the 2,000 apartments that were available. It was determined that to receive the maximum revenue of $1.81 million, each apartment would have to be rented at a monthly rental rate of $950. At this monthly rate, which was lower than the original $1300, 1,900 apartments were in demand to be rented leaving a surplus of 100 apartments. This shows that the lower the price placed on a good, the demand for the good increases. With this concept in place to rent out all of the apartments that Goodlife owns, the price for the apartments would have to be lowered even more to increase the demand for them. Although this seems like a very good concept for the consumers, the suppliers see differently. At lower prices, suppliers tend not to want to provide a high number of what they have to offer becau ...