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Question
Suppose the demand for rental apartments decreased substantially. We would expect to observe
A) no change in rent and a sharp reduction in quantity supplied in the short run, and an even larger decrease in quantity supplied in the long run.
B) a large decrease in quantity supplied in the short run, followed by a counter -reaction and an increase in quantity supplied in the long run.
C) a small decrease in quantity supplied and significantly lower rents in the short run, and quantity supplied to decrease much more in the long run.
D) a large decrease in quantity supplied in the short run and the long run, but much larger reductions in rent in the long run.
Answer
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