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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_demand http://www.csun.edu/bus302/Lab/ReviewMaterial/micro3.pdf. http://economics.about.com/cs/micfrohelp/a/priceelasticity.htm http://www.moneymorning.com/2009/08/03/us-gdp-2/