PT151.S4.Q6 > Question

SECTION 1 · rc

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SECTION 3 · lr

SECTION 4 · lr

Increased housing supply generally leads to lower rents for existing apartments, but rents for existing apartments in Brewsterville rose when the housing supply increased.

The correct answer will be a hypothesis that explains why, contrary to what usually happens, existing apartments became more expensive when the housing supply increased. This explanation must show some quirk in Brewsterville’s housing situation that causes rents to rise with supply, or else some other factor that affected the prices of existing apartments without factoring in housing supply. The result must be a positive correlation between existing rents and the housing supply.

Even if just a few new apartments were constructed, existing rents would still be expected to drop—or at least stay the same. We need to know why they actually rose.

The new apartments, no matter how desirable, contributed to the housing supply. And yet, rents for existing apartments rose. We need something that explains why that happened.

We care about what happened in Brewsterville, not in areas close-by. If anything, this just increases the discrepancy—why did Brewsterville rents rise when nearby rents fell?

Where did these people go? Does this mean there were more vacancies, which we would expect to lower rents further? This doesn’t give us enough information to be a true explanation.

Even though the housing supply rose, that housing supply was quickly filled by people moving into Brewsterville. The end result was more housing, but even more people, hence why rents rose for existing apartments.

PrepTest 151 - Section 4 - Question 6

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