Te characteristics of University housing Fixed price.
fiixed Supply
Obtaining housing is not related to price or other market factors. It functions on a first come first served basis.
So timing is the main factor. Although, there may be some exceptions. In any case, doesn’t it remind you of one of the experiments conducted?.
It would be the binding price ceiling experiment
Therefore in reality the supply and demand curve for University housing will be the following 
The demand for University housing is higher than the fixed quantity supplyed
But how does University housing as a single supplier change the market curves?
The most similar example may be government subsidy housing.
On the demand side it may alter the demand curve by either reducing the overall demand or altering the off-campus housing market for students around OSU.
Which do you think it is?
This is assuming that the price of University housing is higher than the Off-campus housing market equilibrium price.
If not, case (A) would not change much because of University housing non economic benefits to students and parents.
Case (B) may change to the following
I think there is just a lack of supply and a really high demand with location as the main determinate for price. Suppliers know that no matter what the houses look like students will pay the big bucks to live in a disgusting old outdated home. I know my sophomore year I lived in a disgusting place that was falling apart for like 400 dollars a month but it was a great location for me so I was willing to pay. There is no incentive for sellers to keep the places nice because they know students will buy them because of the lack of supply. The better location the more they can jack up the prices. As students there is nothing we can do to keep prices low, because there are too many other students willing to pay.
ReplyDelete