Lecture

Real Estate Economics: Price Equilibrium Effects

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Description

This lecture explores the effects of equilibrium price changes in real estate economics. It covers scenarios such as price decreases leading to increased surplus for buyers, price increases resulting in surplus losses for buyers, and price hikes benefiting new and existing sellers. The impact of demand and supply fluctuations on buyer and seller surpluses is also discussed, along with a recapitulation of the various equilibrium perturbations. The instructor emphasizes the interdependence of market sides and the importance of understanding how changes on one side affect the other, illustrating with examples the implications of demand and supply shifts on market outcomes.

In MOOC

Soil and Real Estate Economics II

An economics course that presupposes no formal economic knowledge other than that developed in the first modules of the first part of this course, Land and Property Economics I. In this second course (Economics of Land and Real Estate II), we will cover..: The developer's countdown and its influence on land prices The calculations of property developers in general Market supply and demand and how they determine and vary prices Differentiating land by urban location

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Related concepts (29)

Economic equilibrium

In economics, economic equilibrium is a situation in which economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. For example, in the standard text perfect competition, equilibrium occurs at the point at which quantity demanded and quantity supplied are equal. Market equilibrium in this case is a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers.

General equilibrium theory

In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an overall general equilibrium. General equilibrium theory contrasts with the theory of partial equilibrium, which analyzes a specific part of an economy while its other factors are held constant.

Competitive equilibrium

Competitive equilibrium (also called: Walrasian equilibrium) is a concept of economic equilibrium, introduced by Kenneth Arrow and Gérard Debreu in 1951, appropriate for the analysis of commodity markets with flexible prices and many traders, and serving as the benchmark of efficiency in economic analysis. It relies crucially on the assumption of a competitive environment where each trader decides upon a quantity that is so small compared to the total quantity traded in the market that their individual transactions have no influence on the prices.

Price floor

A price floor is a government- or group-imposed price control or limit on how low a price can be charged for a product, good, commodity, or service. A price floor must be higher than the equilibrium price in order to be effective. The equilibrium price, commonly called the "market price", is the price where economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change, often described as the point at which quantity demanded and quantity supplied are equal (in a perfectly competitive market).

Price

A price is the (usually not negative) quantity of payment or compensation expected, required, or given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in the commercial exchange, the payment for this product will likely be called its "price". However, if the product is "service", there will be other possible names for this product's name.

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