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:

Shareholder Value

The worth delivered to shareholders due to management's ability to grow sales, earnings, and dividends over time.

Business Costs

All expenses incurred in the operation of a business, including manufacturing, marketing, and administrative expenses.

Fixed

A term describing costs or payments that do not change in amount over a certain period, regardless of production levels, business activity, or other factors.

Variable

In the context of mathematics or statistics, a symbol that represents an unknown or changeable quantity.