According to a recent study, the elasticity of the supply of residential real estate in Nicosia is 1.4 and in Limassol 1.9. If we assume that in 2022 the demand for residential real estate will increase by 8% in both cities and that the supply will remain stable in both cities, how will the prices of residential real estate in both cities be affected. Will they be affected in the same way or differently? If they are affected differently, explain how the effect on prices will differ in the two cities and why.

According to a recent study, the elasticity of the supply of residential real estate in Nicosia is 1.4 and in Limassol 1.9. If we assume that in 2022 the demand for residential real estate will increase by 8% in both cities and that the supply will remain stable in both cities, how will the prices of residential real estate in both cities be affected. Will they be affected in the same way or differently? If they are affected differently, explain how the effect on prices will differ in the two cities and why.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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