Distinguishing Demand Changes on a Graph
Consider a city's rental housing market represented by a standard supply and demand diagram, with rent on the vertical axis and the number of tenancies on the horizontal axis. An economist observes two separate phenomena:
- A city-wide decrease in average rent leads to an increase in the number of apartments rented.
- A major tech company opens a new headquarters in the city, leading to more people wanting to rent apartments at every possible rent level.
For each phenomenon, state whether it is represented by a 'shift of' the demand curve or a 'movement along' the demand curve, and briefly explain your reasoning.
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CORE Econ
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
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Consider the rental housing market for a city, represented by a standard supply and demand diagram where the vertical axis is rent and the horizontal axis is the number of tenancies. A new, popular streaming series is filmed and set in the city, significantly boosting its cultural appeal and causing a large number of people to want to move there. Which of the following graphical changes accurately illustrates the immediate impact of this event on the market?
Distinguishing Demand Changes on a Graph
For a city's rental housing market represented on a standard supply and demand diagram (with rent on the vertical axis and the number of tenancies on the horizontal axis), match each market event with its most direct graphical consequence.