Chapt 2 (TC) - Trey Caldwell Chapt 2 Prob 2,4 8 2 Q:Why is...

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Trey Caldwell Chapt 2 Prob 2,4 & 8 2. Q:Why is the supply of real estate considered inelastic in the short run? What are the implications of changes in demand if supply is held fixed? A:This is do to the fact that there is a delay in the producers ability to meet new demand. This can be attributed to zoning regs, build time, and the large amount of capital required. It will lead to a set supply therefore only those willing to pay top dollar and those who have a business plan that can warrat extra building cost will be able to attain the select number of locales. It should be noted that this is due to the bidding war that would occur to the a larger number of bidders. Please refere to a inelastic supply graph if you require an islatrastion. 4.Q:List the primary attributes of real estate markets compared to perfectly competitive markets. What are the implications of each attribute on the market’s ability to respond to changes in demand?
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