The price of luxury condominiums is rising tremendously over the past few months despite an increase in the number of launches by the developers. In fact, the developers had set higher prices for the launch of their new projects.Based on economic analysis, explain why the price of luxury condominiums is rising despite an increase in the number of launches by the developers? [12 marks]
Chapter: Theory of Demand and Supply
Application of the Theory of Demand and Supply is needed to identify the relevant factors affecting the changes in demand and supply of luxury condominiums. By doing so, the market equilibrium can be determined, which affects the equilibrium price and quantity for these residential properties.
07 August 2018