In 1992, LAPD policemen were acquitted of beating Rodney King. Rioting, looting, and civil disturbance ensured. (Links to an external site.) In response to the lawlessness, many people tried to purchase a gun. The gun stores quickly ran out of inventory and when people went to the store there were no guns available for sale. This is an example of excess supply at the pre-riot price or excess demand at the pre-riot price? In 2007, the mortgage market collapsed because of widespread defaults in the sub-prime mortgage market (Links to an external site.) caused by perverse incentives created by government regulation of the mortgage industry. Many homeowners had insufficient income to make their monthly mortgage payments and were forced to sell their homes to avoid foreclosure or the bank foreclosed and the banks sold their homes. In the real estate market, many homes were listed for sale but no one offered to but them at the listed price. Eventually, the median sale price dropped by 50% over a one year period. Pick the right choice: this is an example of excesses supply of homes before the price fell 50% or excess of demand of homes before the price fell 50%
In 1992, LAPD policemen were acquitted of beating Rodney King. Rioting, looting, and civil disturbance ensured. (Links to an external site.) In response to the lawlessness, many people tried to purchase a gun. The gun stores quickly ran out of inventory and when people went to the store there were no guns available for sale.
This is an example of
In 2007, the mortgage market collapsed because of widespread defaults in the sub-prime mortgage market (Links to an external site.) caused by perverse incentives created by government regulation of the mortgage industry. Many homeowners had insufficient income to make their monthly mortgage payments and were forced to sell their homes to avoid foreclosure or the bank foreclosed and the banks sold their homes. In the real estate market, many homes were listed for sale but no one offered to but them at the listed price. Eventually, the median sale price dropped by 50% over a one year period.
Pick the right choice: this is an example of excesses supply of homes before the price fell 50% or excess of demand of homes before the price fell 50%
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