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    Wing Hei Yip
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    The 1994 World Cup was held in the US, drawing international fans to matches. The final was in Los Angeles, where rental accommodation supply was fixed but demand was high. This caused many fans to be unable to find affordable lodging as prices rose. Raising prices to the point where supply met demand would have increased rental income for owners by clearing the market.

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    The 1994 World Cup was held in the US, drawing international fans to matches. The final was in Los Angeles, where rental accommodation supply was fixed but demand was high. This caused many fans to be unable to find affordable lodging as prices rose. Raising prices to the point where supply met demand would have increased rental income for owners by clearing the market.

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    5 views1 page

    Econ PP

    Uploaded by

    Wing Hei Yip
    The 1994 World Cup was held in the US, drawing international fans to matches. The final was in Los Angeles, where rental accommodation supply was fixed but demand was high. This caused many fans to be unable to find affordable lodging as prices rose. Raising prices to the point where supply met demand would have increased rental income for owners by clearing the market.

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    © All Rights Reserved
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    1. The World Cup of 1994 was held in the USA.

    People from all over the world went to the US to


    watch the matches.
    The Final Match was held in Los Angeles. The rental accommodation in the city was fixed in
    supply. Due to the high demand, many disappointed football fans could not rent an
    accommodation unit because the rental price was not high enough.
    (i) Draw a well-labelled supply-demand diagram to show the above situation. (2 marks)
    (ii) If the rental price had been raised to a level where the demand had met the fixed supply, how
    would the rental income of the accommodation owners be different from that in (a)(i)? Explain
    with the aid of a diagram. (5 marks) 1995/I/9a

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