This is because, the higher prices are, the higher the quantity supplied. This is according to the law of supply. When prices of houses rise, the profit that would be earned by construction companies would also increase.
How should the factory respond to the increase in price?
The law of supply says that a higher price will lead producers to supply a higher quantity to the market. Because businesses seek to increase revenue, when they expect to receive a higher price for something, they will produce more of it. Meanwhile, if prices fall, suppliers are disincentivized from producing as much.
Which best describes the builder's supply of houses?
Explanation: The builder's supply of houses is inelastic, because the supply of houses has less responsiveness on the availability of land.
How does the law of supply say the factory will respond to the increase in the price of blue widget?
It goes in line with the Law of Supply which states that when prices rise, supply rises as well. Increasing supply provides producers with more profit. If the company notices that the price of blue widgets has increased, they should increase supply.
Why does it cost more to build a house?
Here are some other reasons why housing is so expensive to build in California: Land is just more expensive in California than other places. In the Golden State, the cost of land is about 12% of total construction costs, compared to about 5% in other states. Labor is also more expensive.
Which of the following does not affect the supply of real estate?
All of these factors can affect the supply of real estate EXCEPT... Demographics; demographics affect the demand for real estate.