3 ms·
Because there aren't 100 people in the model city willing/able to pay $4 rent. The landlords might attempt to do what you suggest, but as they fail to rent the
by stephencanon 12y ago
Because there aren't 100 people in the model city willing/able to pay $4 rent. The landlords might attempt to do what you suggest, but as they fail to rent their properties month after month, they will gradually drop the rent they are asking until equilibrium is reached.
- hiou 12y agoHere are a few reasons[0] you might want to look into about this fabled "equilibrium" in commercial real estate. [0] http://www.ezracompany.com/2012/04/30/why-do-landlords-let-spaces-remain-vacant-2/ http://www.ezracompany.com/2012/04/30/why-do-landlords-let-s...
- sefu 12y agothis assumes a perfect system, with specific conditions. the real estate market tends to be neither. apartments go vacant all the time waiting for the $4 swm.
- astrodust 12y agoThis highly simplified example doesn't have sufficient information to calculate what the equilibrium will be. Obviously it will be lower than $4, but what?