Question

The rent for​ 2-bedroom apartments in detroit has fallen from an average of​ $796 in september 2014 to​ $717 in march 2015. demand for​ 2-bedroom apartments in detroit was falling during this period as well. this is hard to explain because the law of demand says that lower prices should lead to higher demand.

Answer 1

The supply and demand for any rooms varies from city to city. In the case for Detroit, a major breakdown in government and stability affected a large amount of real estate and business industry. With job loss there was no longer a need for people to rent apartments, which fueled the price cut as well as the demand for a 2-bedroom apartment.