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Shankari22
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Critical Reasoning 26 Sep 2019, 08:35
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An industry analyst asserted in his recent report that the relative scarcity of housing in a particular market leads to larger than normal increases in price. During the late 1990s, according to the analyst's report, occupancy rates-a measure of the percentage of housing occupied at a given time-in crowded urban markets such as New York and San Francisco hovered around 99.5%. During the same period, housing prices increased by as much as 100% per year, compared to more normal past increases in the range of 5% to 15% per year. Which of the following is an assumption that supports the analyst's assertion?


A. In the housing market, there generally must be at least five buyers per seller in order to cause larger than normal increases in price.

B. Increases in demand often reflect an influx of new buyers into the marketplace or an unusual increase in buying power on the part of the customer.

C. The U.S. housing market showed a larger than average increase in the 1990s across the country, not just in crowded urban areas.

D. Price increases do not cause people to withhold their houses from the market in the hopes that prices will increase even further in the future.

E. A significant rise in housing prices in a specific area may cause some potential buyers to relocate to other, less pricey areas.


Can anyone please explain why is option "B" wrong??

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Critical Reasoning 26 Sep 2019, 08:43
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Shankari22
An industry analyst asserted in his recent report that the relative scarcity of housing in a particular market leads to larger than normal increases in price. During the late 1990s, according to the analyst's report, occupancy rates-a measure of the percentage of housing occupied at a given time-in crowded urban markets such as New York and San Francisco hovered around 99.5%. During the same period, housing prices increased by as much as 100% per year, compared to more normal past increases in the range of 5% to 15% per year. Which of the following is an assumption that supports the analyst's assertion?


A. In the housing market, there generally must be at least five buyers per seller in order to cause larger than normal increases in price.

B. Increases in demand often reflect an influx of new buyers into the marketplace or an unusual increase in buying power on the part of the customer.

C. The U.S. housing market showed a larger than average increase in the 1990s across the country, not just in crowded urban areas.

D. Price increases do not cause people to withhold their houses from the market in the hopes that prices will increase even further in the future.

E. A significant rise in housing prices in a specific area may cause some potential buyers to relocate to other, less pricey areas.


Can anyone please explain why is option "B" wrong??
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Discussed here: an-industry-analyst-asserted-in-his-recent-report-that-the-relative-sc-196648.html Hope it helps.

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Hi there,
This topic has been closed and archived due to inactivity or violation of community quality standards. No more replies are possible here.
Where to now? Join ongoing discussions on thousands of quality questions in our Critical Reasoning (CR) Forum
Still interested in this question? Check out the "Best Topics" block above for a better discussion on this exact question, as well as several more related questions.
Thank you for understanding, and happy exploring!
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