Share
Explore BrainMass

Supply and Demand Simulation

Can you help me with the following I seem to be struggling.

Referring to the supply and demand simulation,

Prepare a 700-1050-word paper summarizing the content. In your paper, be sure to address the following:

1) Select a good or service produced by a organization you are familiar with. Is the price elasticity of demand for this product price elastic or price inelastic? Based on this determination what would the impact of raising the price of the product? What would be the impact of lowering the price of the product?

2) Using the same good or service selected in item 1, determine substitutes and complements, and answer the following questions:

a) What has happened to the price of the substitutes and complementary goods/services for your selected product over the last year?

b) How have price adjustments impacted the demand for the selected product?

I need citation information in the document as well as the reference listing for the end of the paper.

Thank you for your help

Attachments

Solution Preview

Supply and Demand Simulation

Can you help me with the following I seem to be struggling.

Refering to the supply and demand simulation,

Prepare a 700-1050-word paper summarizing the content. In your paper, be sure to address the following:
At the inception the simulation discusses how a monopoly has to reduce prices to increase the quantity sold. The simulation then demonstrates how higher rates lead to an increase in supply, however, this causes a reduction in demand because of substitutes, so it becomes necessary to reduce the rates to capture the potential demand. The simulation shows how it would not be possible to supply more if the variable costs are not covered by the present price level. If the maintenance costs are covered by the price (rate) the company can lease out more apartments. Further, at lower prices the supply is curtailed because the variable costs are not covered. The simulation shows that the residual flats can be rented at lower rates to meet the latent demand for lower priced products. As the income increases, the preferences of the customers change. They now prefer costlier goods. This makes it necessary to lower the prices further to sell the apartments. The setting up of office of Lintech would mean an increase in the demand for apartments and so the rents should be increased.
1) Select a good or service produced by a organization you are familiar with. Is the price elasticity of demand for this product price elastic or price inelastic? Based on this determination what would the impact of raising the price of the product? What would be ...

Solution Summary

This posting gives you an in-depth insight into Supply and Demand Simulation

$2.19