Consider the market for rental accommodation.In the short run,the supply of this product tends to be
A)infinitely price elastic.
B)very price elastic.
C)unit price elastic.
D)very or completely price inelastic.
E)irrelevant to the housing market price.

Question

Quizplus · Accepted Answer

In the short run, the supply of rental accommodation is very or completely price inelastic because it takes a significant amount of time and resources to construct new rental units or convert existing ones. Therefore, even if there is an increase in demand for rental accommodation, it is difficult for landlords to increase their supply in the short term. This results in a situation where landlords are able to maintain their rental prices even if the demand increases, making the supply price inelastic.

Consider the Market for Rental Accommodation