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The Long-Run Supply of Housing
* Scenario 1: Owner-occupied housing
- Suburban or rural areas
- National market for inputs
* Questions
- Is this an increasing or constant cost industry?
- What would you foresee the elasticity of supply?
* Scenario 2: Rental property
- Urban location
- High rise construction cost
- What would you foresee about the elasticity of supply?
Figure 3.7 in the above textbook. Using the figure in guide, determine the approximate size of the market surplus or shortage that would exist at a glance of a) $40 b) $20
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what is the theory of supply
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