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Demand and Price
Your name
Class
University
Data of Burlington Area
Hyde Park home for sale $84,900
3 Beds, 2 Baths, Hyde Park home for sale $1,295,000
5 Beds, 2 Baths, House
(Homegain, 2010)
Data of St.Louis Mo
Ellisville home for sale $514,900
(Lemar Park Ct 3 Beds, 2 Baths,
House)
Ellisville home for sale $475,000
(4 Beds, 4 Baths, House)
Data of Paducah Ky
Paducah home for sale $97,900
3 Beds, 2 Baths, House
Paducah home for sale $75,000
Beds, 2 Baths, House
7. Paducah home for sale $49,900
2 Beds, 1 Baths, House
Factors affecting Difference in
Prices
It is determined by Demand & Supply
Forces
Demand
As per csun.edu, “Demand is the
relationship between the price of a good
and the quantity of the good that
consumers are willing and able to buy.”
Factors causing changes in demand are:
•Income and wealth
• prices of substitutes and complements
• population
• preferences
Supply
As per csu.edu, “Supply is the
relationship between the price of a
good and the quantity of the good that
firms are willing and able to produce
and sell.”
Factors causing changes in supply
are:
prices of inputs (labor, capital, etc.)
technology
number of firms in the industry
Some Instances of Impact of
Demand on Housing
Things that would cause a rightward
shift are:
- Increase in Income
- Favorable change in taste for the
product
- Increase in population
- Increase in price of substitutes
Some Instances of Impact of
Supply on Housing
Reduction in input cost which will
lead to increase in supply
Advancement of technology
Increase in number of firms
Impact of National Income
Right now US economy is facing
severe recession as U.S. gross
domestic product (GDP) shrank 1% in
the second quarter, following the first
quarter’s 6.4% drop. (Moneymorning,
2009)
There had been recession in US
which has led to decline in GDP
growth and hence the decline in
demand and prices of housing.
References:
en.wikipedia.org/wiki/Supply_and_de
mand
http://www.csun.edu/bus302/Lab/Revi
ewMaterial/micro3.pdf.
http://economics.about.com/cs/micfro
help/a/priceelasticity.htm
http://www.moneymorning.com/2009/08
/03/us-gdp-2/