Question

If residents began moving out of a community in large numbers, prices in those communities would tend to

A)remain stable, because fluctuations in prices are gradual over a period of years.
B)rise, because the availability of more property will bring an influx of buyers.
C)rise, because homes left empty will likely be highly sought-after ""fixer uppers.""
D)fall, because more homes will be on the market competing with each other.

Answer 1

If residents leave a community in large numbers, community housing prices are likely to fall due to increased supply and competition among available homes.

Step-by-step explanation:

If residents began moving out of a community in large numbers, prices in those communities would tend to fall because more homes will be on the market competing with each other.

This is a fundamental effect observed in supply and demand economics. When there is an increase in supply (more homes available due to residents moving out), without a corresponding increase in demand, it exerts downward pressure on prices.

The market adjusts to the new level of demand, potentially resulting in a price decline until a new equilibrium is reached. The referenced material illustrates similar principles where changes in demand for rental housing lead to shifts in prices and equilibrium quantities.