Modeling Apartment Demand Demand: Suppose the most any one person is willing to pay to rent a close apartment is $500 /month Then $500→Q〓1. Suppose the price has to drop to $490 before a 2nd person would rent Then $490→Q=2
Modeling Apartment Demand Demand: Suppose the most any one person is willing to pay to rent a close apartment is $500/month. Then p = $500 QD = 1. Suppose the price has to drop to $490 before a 2nd person would rent. Then p = $490 QD = 2
Modeling Apartment Demand The lower is the rental rate p, the larger is the quantity of close apartments demanded p→Q个 The quantity demanded vs price graph is the market demand curve for close apartments
Modeling Apartment Demand The lower is the rental rate p, the larger is the quantity of close apartments demanded p QD . The quantity demanded vs. price graph is the market demand curve for close apartments
Market demand Curve for apartments
Market Demand Curve for Apartments p QD
Modeling Apartment supply Supply: It takes time to build more close apartments so in this short-run the quantity available is fixed (at say 100)
Modeling Apartment Supply Supply: It takes time to build more close apartments so in this short-run the quantity available is fixed (at say 100)
Market Supply curve for apartments 100
Market Supply Curve for Apartments p QS 100