Lakeville is a small community that completely surrounds a scenic lake up north.Lakeville's zoning regulations require that residential lots have at least one hundred feet of frontage,or shoreline,on the lake.The total shoreline of the lake is 5,000 feet.
There are currently 40 homes on the lake.If demand for lakefront property in Lakeville increased,
A)the price of lakefront property would not change because there is excess supply.
B)the quantity supplied of lakefront property would decrease because there is excess demand.
C)the quantity supplied of lakefront property would be zero because there is no room for new residents.
D)the quantity supplied of lakefront property would increase,and the price per lot would increase.

Question

Quizplus · Accepted Answer

Since the demand is high,the price per lot would increase and the quantity supplied would also increase as there is incentive to build more homes.

Lakeville Is a Small Community That Completely Surrounds a Scenic