Business and Managerial Economics Essay Example | Topics and Well Written Essays - 2500 words

business sector and Managerial Economics - Essay ExampleTrace the evolution of the rent and the quantity traded over quantify (in the long-run) (20 marks)An earthquake will affect not only the emerge side but also the consider side of the housing market. On the supply side, the earthquake will reduce the supply of housing and, take for granted that demand remained unchanged, the earthquake will lead to increases in rentals. However, demand does not remained unchanged in a major earthquake that caused signifi trickt damage to housing. Aftershocks take place and these sent jitters to consumers. City hire like transport, electricity, and water argon affected as well. Schools and workplaces may not be able to operate for some time. Thus, a major earthquake can send consumers to an exodus to locations safer from earthquakes and their aftershocks. In short, demand is affected as well. For this reason, it can happen house rent can remain unchanged or landowners may offer discounts to consumers. If demand is significantly reduced, house rent can even decrease and this seems to be the short-run effect in a strong earthquake everywhere. In the medium term as a location recovers from the earthquake, city and other services are restored and school/workplace operations normalize. But because supply is unable to respond quickly, housing supply may be fixed as demand is restored sticker to normal. Therefore, in the medium term, rentals may be higher than the immediate pre-earthquake levels. In this case, economic profit can be higher than normal and investors are encouraged to go into the housing sector. More housing units are built and the prices of house rentals decrease. The trend continues until the situation is normalized. This means that either house rentals are restored back to the pre-earthquake levels or the prices of rentals are back into the situation where economic profit is zero or normal. This discussion is akin(predicate) to Varian (2005, p. 9).Rest aurants that charge reasonable prices for food but