Question

Your vendors have instructed you to advertise their new building as 'apartments starting from 200,000' but the lowest priced one is now sold. They instruct you not to change the signboard so as to attract more enquiries, even though the lowest priced apartment is now 280,000. What should you do?

1) Continue advertising the apartments starting from 200,000
2) Update the signboard to reflect the new lowest price of 280,000
3) Remove the signboard altogether
4) Consult with the vendors for further instructions

Answer 1

To address the ethical dilemma in real estate advertising, the best action is to consult with the vendors for further instructions to potentially update the signboard with the accurate starting price, ensuring honesty in advertising and maintaining consumer trust.

Step-by-step explanation:

The question deals with an ethical dilemma in advertising real estate prices. The ethical course of action would be to consult with the vendors for further instructions to update the signboard to reflect the new starting price of $280,000. Continually advertising apartments starting from $200,000 when the lowest-priced apartment is now $280,000 can lead to a breach of advertising standards and consumer trust. By consulting with the vendors, it might be possible to address the situation without misleading potential customers while still achieving the vendors' goal of attracting enquiries.

About economics, this scenario relates to issues such as price ceilings and rent controls. For example, if a city government sets a rent control to keep prices constant, it can unintentionally create a shortage as the quantity demanded exceeds the quantity supplied, as demonstrated in the example where the quantity demanded for apartments at the price ceiling of $500 is 19,000 units, but the quantity supplied remains at 15,000 units.