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Question 8 of 25

Which of the following best explains why the supply of housing often cannot
keep up with increases in demand?
A. Zoning laws prevent real-estate developers from being creative.
B. Housing is expensive and time-consuming to build.
C. Demographic changes make the demand for housing
unpredictable.
D. Banks do not like to invest in new-house construction.
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User Durga Dutt
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1 Answer

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Answer: B. Housing is expensive and time-consuming to build.

Step-by-step explanation:

Supply of housing cannot keep up with increases in demand simply because housing is not an easy good to supply. Building a house takes time and is quite expensive because land needs to be bought, materials as well and then there is the labor to pay for as well.

In the face of this, the people who want houses often find that they cannot get houses fast enough because the suppliers are sourcing funds and rightfully taking time to make houses available.

User Chuck Vose
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