The short-run supply for rental housing is quite ________ while the long-run supply for housing is quite ________.
A)elastic; inelastic
B)inelastic; elastic
C)flat; steep
D)inelastic; inelastic
E)elastic; elastic

Question

Quizplus · Accepted Answer

In the short-run, rental housing supply is relatively fixed as it takes time and capital to build new housing units. Therefore, the short-run supply for rental housing is relatively inelastic. However, in the long-run, as firms and individuals have more time to adjust to changes in demand and supply, the supply of rental housing becomes more elastic as more housing units can be constructed or converted to rental properties. Therefore, the long-run supply for housing is relatively elastic. Choice B is the only option that correctly identifies both the short-run and long-run supply for rental housing.

The Short-Run Supply for Rental Housing Is Quite ________ While