Supply and Demand Simulation1. What causes changes in supply and demand in the simulation? The factors that influence supply and demand in the simulation are driven by the availability of rental apartments, rental demand, the number of available renters, and price. According to the simulation, the demand curve is downward sloping. In the simulation, as the price decreased, demand increased. The supply curve, however, is positively sloping. The quantity of two-bedroom apartments has increased with the increase in price. A surplus in the apartment market puts downward pressure on prices. This means that to attract prospective renters, GoodLife would have to lower its prices. The shortage of available apartments, however, exerts upward pressure on prices. To maintain the balance between quantity demanded and quantity supplied, GoodLife would need to increase prices.2. How do changes in supply and demand affect your decision making? The changes in supply and demand in the simulation were caused by several factors. Changes in the direction of GoodLife Management and population changes within Atlantis and outlying areas have had an effect on supply and demand in the simulation. The change in tenant preferences has caused the demand for apartments to decrease. GoodLife Management began converting rental apartments into condos for sale, causing supply to decrease at the same time as demand decreased. Because of this, both the supply and demand curves have shifted to the left. List four key points of the reading tasks that were emphasized in the simulation. Four key points in the simulation were supply and demand, equilibrium, changes in supply and demand, and price ceilings. The simulation is based on supply and demand and is very useful for understanding the different factors that can influence it. Equilibrium occurs when the quantity demanded equals the quantity supplied. The simulation showed that if prices were below equilibrium, the quantity of apartments demanded exceeded the quantity available and caused a shortage in the number of apartments available. This effect also increases the price of the rental apartment. If prices were above equilibrium, the opposite would happen. There would be a surplus of available apartments and this would drive prices down. Changes in supply and demand in the simulation were illustrated by several factors that caused a simultaneous decrease in supply and demand.