Microeconomics And The Laws Of Supply And Demand

This can be used to portray the differences between short and long run quantity supplied in relation to rent controls. As the price falls from p1 to p3, there is only a small change in the number of rental houses supplied, from q1 to q3. This is due to the fact that in the short run there are fixed factors, such as capital, that limit the ability to change. Whereas in the long run, these factors are flexible and therefore there is a greater reduction of rental housing from q1 to q2, even with a smaller price reduction from p1 to p2.

The obstacles landlords have to overcome causes them to lose their motivation to invest in rental properties and they instead flock towards other housing options to include condominiums, office towers, and hotels.

Supply and demand is constantly changing for different products and services for a number of reasons. The good I chose to write about is the laptop I purchased to be used for school. The following are factors that could cause possible changes in the supply and demand of laptops on the market. When looking at the supply aspect of a laptop from manufacturers’ one factor that could change the supplied amount would be the cost to produce the item. If the cost to produce a laptop was to increase too much the supply may go down. Another factor would be the demand of the laptop. As long as there is demand for the laptop than the supply should be available however if the demand was to drop than the supply of the laptop could drop as well.

This is a result of a demand shift to the left related to a lack of available tenants for the apartments. The property management company has to decrease rental rates allowing the quantity supplied to decrease as well (University of Phoenix, 2012), creating a downward swing in the supply curve. The price of rentals decreased to create less quantity that is available for rent creating equilibrium and a decrease in surplus. This is a difficult decision to lower price significantly but will continue to create revenue for the property management company while decreasing supply of vacancy.

Supply is also affected by the growth of a community over time. For example, a new city with 10,000 homes, expanding rapidly, will have low supply and therefore more expensive homes. An older city, however, with 50,000 homes and fewer and fewer new residents, will see

After World War I, the demand for rental housing in New York City threatened to drive rents higher. In order to keep rents from rising to their equilibrium levels, city officials imposed rent ceilings. Over time, the implementation of rent ceilings caused a market shortage to occur because the demand for rent controlled units exceeded the supply. According to the law of supply and demand when the price decreases below the equilibrium point there is a move to the right on the demand curve. Conversely, the decrease in price causes a move to the left on the supply curve. Customers demand more of an item, in this case, housing, when the price is lower; however, the suppliers are willing to supply less at the new lower price. This shift in New

Tenants who relocate, sick of repairs, or request more freedom/flexibility provide some contribution to the rental market's upswing. Because of this, rental home or apartment prices increase. The lucrative opportunity is luring many experienced and inexperienced people into this industry. Don't attempt to dive head first into this opportunity. Seek the help of this article and a Mississauga Real Estate professional about the ins and outs of the industry first.

Housing affordability problems commonly emerge when housing cost increases faster than household incomes (Yates, 2008). For purchasers, the house price mainly depends on the house price and the interest rate. In the Australian housing market, increases in the house price and interest rate indicated the reasons why housing affordability problems occurred over the past few years.

When the rental price is artificially maintained at a low level, it will no longer represent the function of rationalizing consumption, and in this way more "lucky" people will be willing and able to occupy much larger areas than if the price could free variables.

Just as many other sectors of an economy, the housing industry is subject to positive and negative externalities. Externalities, by definition, signify costs or benefits that are not transmitted through prices, but that are nonetheless incurred by a 'third party' or a party that did not agree to or was not part of an action or a transaction that caused the said cost or benefit. Within these confines, thus, positive externalities become (external) benefits, and negative externalities become (external) costs. These economic terms are useful because they help people understand and justify cases in which individuals may either be harmed by or benefit from the actions of others (Basic Economics, 2012).

George ascertains targeting incentives of property speculation would depress property prices allowing for affordable housing to be more widely available. The demand for land incorporates both value in use and value in exchange accounting for the accommodation built on it and its

1. Economics – the efficient allocation of the scarce means of production toward the satisfaction of human needs and wants.

Society often falsely associates luxurious cities and poverty ridden countries as failures of affordable housing. Contrary to this belief, affordable housing has manifested itself in numerous forms. Spreading itself across world property markets from The United States and Canada to The United Kingdom, this trend has inflated house values and led to numerous consequences. Auckland is proving itself to be a notorious example of the affordable housing social problem.

Describe what has occurred to change the demand for, or the supply of, the good or service, and market prices of those products or services

Accordingly, we will first "analyze" competitive markets, by discussing demand and supply separately. Then we will try to put them back together (synthesize them) in order to understand the working of competitive markets.