When a new major league baseball stadium is built in the suburbs of a large city,the rents of apartments surrounding the stadium skyrocket because
A) the supply of the apartments is high.
B) the amount of land available for apartments is fixed.
C) stadium owners want the area to be upscale.
D) everyone wants to live near a stadium.
E) the players want to live nearby and can afford high rents.

Question

Quizplus · Accepted Answer

The amount of land available for apartments is fixed, meaning the supply of apartments surrounding the stadium cannot easily increase to meet the rise in demand caused by the stadium's construction. As a result, landlords are able to charge higher rents for their apartments. Factors such as stadium owners' desires and players' preferences may contribute to the demand for the area, but ultimately it is the limited supply of housing options that drives up prices.

When a New Major League Baseball Stadium Is Built in the Suburbs