Answer to Question #127828 in Microeconomics for Sourabh

Question

Has alternative housing been responsible for changes in Demand and Supply Elasticities?
Express your opinion giving suitable justification and examples

Answer 1

Yes, alternative housing has been responsible for changes in demand and supply elasticities. How? The elasticity of demand is the responsiveness of a consumers demand in relation to changes in certain factors, one of them being price changes. The elasticity of supply is the change in supply with changes in factors such as price. Alternative housing is a cheaper form of housing, meaning housing with reduced prices. A reduction in the cost of housing will lead to increased demand since more people will be able to afford alternative housing. Increased demand will alternatively lead to increased supply of alternative housing.