Which of the following is not true about the housing market?
A) The price of housing will increase or decrease in order to achieve an equilibrium
B) An increase in the demand for housing will cause an increase in the quantity supplied of housing
C) When the demand for housing increases,the price of housing will increase but the quantity supplied will not increase in the short run
D) The housing market is a unique market because most people had to borrow money to buy their homes
E) The only way to increase the supply of housing is to build more houses

Question

Quizplus · Accepted Answer

An increase in the demand for housing will cause an increase in the price of housing (not quantity supplied) in the short run, and will eventually lead to an increase in the quantity supplied in the long run. Option A is true because the market will adjust to achieve equilibrium. Option C is partially true, as explained above. Option D is not necessarily true for all homeowners, as some may have purchased their homes outright without needing to borrow money. Option E is not true, as the supply of housing can also increase through renovations and conversions of existing properties.

Which of the Following Is Not True About the Housing