Following Example 8.8 in the book, the long-run supply of rental housing in most U.S. communities is more inelastic than the long-run supply of owner-occupied housing. Why?
A) Local rental housing regulations
B) Limited demand for rental housing
C) Limitations on the urban land available for rental housing
D) A and C above are correct

Question

Quizplus · Accepted Answer

Local rental housing regulations and limitations on the urban land available for rental housing can make it more difficult and costly to build new rental housing units in most U.S. communities. This leads to a more inelastic supply of rental housing in the long run compared to owner-occupied housing, which can be more easily built in new areas with more available land. Limited demand for rental housing is not a major factor in this difference in elasticity of supply.