Shortage_Of_Apartments

Shortage Of Apartments Economics Essay: Shortage of Apartments Question: Suppose there is a shortage of a product (apartments) but the law forbids any increase in its price (rent). What would be the results of such a situation' Answer: With the current shortages of apartments, the law that has been passed has forbids any increase in the rent. With the situation present the supply appears to be low, and thus causing an inventory shortage. Theoretically, when supply exceeds demand, sellers must lower prices to stimulate sales; on the other hand, when demand exceeds supply, buyers tend to raise the prices up, as they compete to buy and sell. And, that being the first thing that sellers would tend to want to do. Price in this circumstance still has to be kept the same along with quantity. But quality may fluctuate according to improvements and location. Although demand for apartments will rise, not necessarily evenly with its supply when a shortage like this is present. The low supply of apartments can be graphically shown as a regressive supply curve, because, less of an item is supplied at the same or higher price. In this situation the price remains stable. The demand will be expected to rise since the prices are still price, demand, supply, situation, rise, prices, law, apartments, market, exceeds, shortage, because, since, satisfy, same, rent, raise, might, make, low, forbids, factors, change, apartment, therefore, tend, stable, sellers, rising, reasons, rather, purchase, probably, present, passed, one