An apartment complex included a fixed price of water in the monthly rent. One day,the city decided to attach a water meter to each individual apartment and charge thetenant for actual water usage. As a result, water usage in the apartment complexwent way down. Explain this situation using a principle of economics.

Answered: An apartment complex included a fixed…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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An apartment complex included a fixed price of water in the monthly rent. One day,
the city decided to attach a water meter to each individual apartment and charge the
tenant for actual water usage. As a result, water usage in the apartment complex
went way down. Explain this situation using a principle of economics.

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Step 1

At its most fundamental level, economics attempts to explain how and why we make the purchasing decisions. Scarcity, supply and demand, costs and benefits, and incentives are four key economic concepts that can help explain many human decisions.

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