The Elasticity of Supply of Rental Units in New York

question 66

Multiple Choice

The elasticity of supply of rental units in New York City is estimated to be about 0.10.Current price restrictions (price floors) are estimated to decrease the price of rental units by 10% below equilibrium price.By how much would price and quantity supplied change if the price floors were removed from the rental unit market in New York City?

• A) Price will increase by 10% and quantity supplied will increase by 1%.
• B) Price will decrease by 10% and quantity supplied will increase by 1%.
• C) Price will increase by 10% and quantity supplied will decrease by 1%.
• D) Price and quantity supplied will increase by 10%.

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Definitions:

Joint Cost

Costs incurred during the process of producing two or more products at the same time, where the costs cannot be easily separated for each product.

Oat Bran

The outer layer of the oat grain, rich in dietary fiber and nutrients.

Milling

The process of grinding, crushing, or cutting material into smaller pieces or powder, commonly used in food processing and metalworking.

Uncontrollable Costs

Expenses that cannot be directly modified or controlled by a company's management in the short term, often due to external factors.