Basic Concepts

The concept of supply and demand has been around since the beginning of time. It also not only a human thing but also cover every living thing on Earth. Thus understanding the concepts of supply and demand is important for any company or business owner to grasp. Changes in the order of supply and demand constantly evolve as the weeks, months, and years go by. Over the several years that GoodLife Management has done business in the town of Atlantis they have seen many of these changes.

Supply and demand is greatly affected by the business environment as the management team of GoodLife found out. The GoodLife management team saw the shift as the new business came in the families that moved in did not want two bedroom apartments they preferred to have a condominium or a detached home of their own. GoodLife management saw the demand go down and the supply go up, so they decided to adapt to the changing times and convert some of their two bedroom apartments to condos. Another example of what the GoodLife team experienced in regards to supply and demand is that when they were the monopoly in the city of Atlantis they could regulate the price of the apartments of the city and once a competitor came in they had to adjust their rates to keep up with the other apartment and rental property owners. Thus if they over charged the demand would go down and the supply would go up and vice versa.

Marginal analysis is use to make business decisions because they provide the necessary checks and balances. A business will need to weigh the costs against the possible gains in any business decision. Marginal analysis is used to create opportunities for GoodLife management to get the maximum number of apartments rented and at a price that the consumers will pay. An example of how marginal analysis helped the management team at GoodLife is when they attempted to find the balance from the Atlantis housing survey and what they currently charge for their two bedroom apartments.

Our team at GoodLife management determined the appropriate output levels by looks over the research provided from the town of Atlantis and also marginal analysis to understand what would be the best way to accommodate the people of Atlantis. Understanding the shifts in supply and demand is important to remand a key player in the real estate business. How we did this to use charts to look at the trends in the past and current years. For example we used these to determine, what is the appropriate amount to charge our tenants and still gain the maximum profits. Also we also looked at the trends in the market place when Lintech moved their operations into Atlantis to see if the increase of population could affect the supply and demand of our two bedroom apartments. I think overall finding the appropriate outputs levels was a success but long the way we learned a lot because the trends are forever changing and adapting to the changes is necessary to keep up with new business that may come in to town. We looked how differences that occurred we learned to adapt to that and change.

The fixed and variable costs that GoodLife management team. The fixed costs they have is costs to employee the employees they have on staff. They pay their salaries which could be on a weekly, biweekly, or even monthly. Also they have fixed costs of maintence and up keep of their properties. If they do not keep up with these they will not have a business in the first place. For one no one would want to work for them if they do not pay their employees and second they would not have tenants in their buildings because the potential tenants looking at the properties would see this first when they pull up and that would be their first impression. The variable costs that GoodLife