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What effect would a rule stating that university students must live in university dormitories have on the price elasticity of demand for dormitory space

User Blz
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1 Answer

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Answer:

perfectly inelastic

Step-by-step explanation:

This rule would cause the price elasticity to become perfectly inelastic. This is because there is a limited amount of dormitories available and the school has not mentioned adding more, therefore making the quantity finite. Since the rule forces students to need a dormitory, this would make the price rise as more and more dormitories become taken. Meaning that the rise in price plus the stable and constant quantity makes the elasticity perfectly inelastic.

User Kvasir
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