If house purchases and renting an apartment are substitutes, then an increase in the price of a new house results in a rise in the rent charged for apartments.

Question

Quizplus · Accepted Answer

When the price of houses increases, people may find buying a house less affordable and turn to renting as an alternative. This increased demand for rental properties can lead to landlords raising rents.

If House Purchases and Renting an Apartment Are Substitutes, Then