Question

In many​ cities, firms that own office buildings can renovate them for use as residential apartments. According to a news​ story, in many cities​ "residential rents are surpassing office​ rents."   ​Source: Eliot​ Brown, "Developers Turn Former Office Buildings Into​ High-End Apartments," Wall Street Journal​, May​ 7, 2014. The response to an increase in residential rents would be A. a decrease in the supply of office​ space, shifting it to the right. B. an increase in the supply of office​ space, shifting it to the left. C. an increase in the supply of office​ space, shifting it to the right. D. a decrease in the supply of office​ space, shifting it to the left.

Answer 1

The response to an increase in residential rents would be a decrease in the supply of office space, shifting it to the left.

Step-by-step explanation:

While some legislation aims to shield renters from dramatic rentals – or at least legislation that tends to minimize the blow – we are mainly in the will of certain property owners.

Fortunately, tenants can not rent whatever time they choose. They need to wait lawfully for the end of your contract. When a one-year lease has been signed, they will wait a full year before demanding more rent. The same is valid for a two-year loan (and so on). However, if you lease a month by month, a tenant is allowed legally to raise the rent at either the end of every month, if they like.