If the Supply of Rental Housing Increases Causing Its Price

question 56

Multiple Choice

If the supply of rental housing increases causing its price to fall and apartment dwellers move into bigger apartments that cost the same as their old ones, we can infer that the:

• A) demand for apartments is elastic.
• B) supply of apartments is elastic.
• C) demand for apartments is unit elastic.
• D) demand for apartments is inelastic.

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Definitions:

Outstanding Common Stock

The total shares of common stock that are currently held by shareholders, including those held by the public as well as restricted shares owned by the company’s officers and insiders.

Acquisition-Date Fair Value

The valuation of an asset or liability obtained at the time it is acquired or assumed in a business combination.

Goodwill

An intangible asset that arises when a company acquires another business for more than the fair value of its identifiable net assets, representing expected future benefits from synergies, brand, and customer loyalty.

Investment

An asset or item acquired with the goal of generating income or appreciation in value.