Which panel of Figure 3.3 represents the changes in the market for student housing when university enrollment increases and at the same time the university destroys several older residence halls and apartment buildings? Figure 3.3 Shifts of Supply and Demand

A) A
B) B.
C) C.
D)D.

Question

Which panel of Figure 3.3 represents the changes in the market for student housing when university enrollment increases and at the same time the university destroys several older residence halls and apartment buildings? Figure 3.3 Shifts of Supply and Demand
 
A) A 
B) B. 
C) C. 
D)D.

Quizplus · Accepted Answer

Panel C shows a decrease in supply due to the destruction of older residence halls and apartment buildings, which shifts the supply curve to the left. At the same time, there is an increase in demand due to university enrollment increasing, which shifts the demand curve to the right. This results in an increase in equilibrium price and an ambiguous effect on equilibrium quantity.

Which Panel of Figure 3