ECO365 Week 2 Simulation Essay Example

system, understanding both macroeconomics and microeconomics is necessary. Companies determine the lifespan of their products based on their level of demand. The optimal point for a product or service occurs when supply and demand intersect at equilibrium.

Consumer purchasing behavior and firm pricing strategies are influenced by the price elasticity of demand. Alterations in product price can lead to changes in customer buying habits. In cases where there is an increased demand for a specific apartment, landlords have the opportunity to raise rent rates to capitalize on this higher demand; however, customers may decrease their purchases if rent rates become too high.Customers may opt for traditional homes instead of alternative housing options as a result. The impact of price elasticity of demand on consumer purchasing behavior and pricing strategies is evident to companies. High prices can hinder potential profits. Supply and demand charts are useful in determining the optimal price for products or services, as shown by Good Life's successful enhancement of net income and optimization of rental rates using these curves. This approach is particularly effective in the crude oil industry, where supply and demand directly affect prices. When establishing prices, it is crucial to consider price elasticity. The source for this information is D.C. Colander's book "Economics" (8th ed.), retrieved from The University of Phoenix eBook Collection database on April 11, 2013.