New Campus in Town
The question
The market for apartment rentals in the town of Ardenmoor is initially in equilibrium. A large university opens a new campus in Ardenmoor, and several thousand students arrive looking for somewhere to live. Assume no new buildings are constructed and landlords' operating costs are unchanged. Show the effect on the market for apartment rentals in Ardenmoor. Show the effect on the Supply and Demand graph.
Drag a curve, or use the arrow buttons. Want the free-play version with every control? Open this graph in the sandbox.
New Campus in Town: the worked answer
On the Supply and Demand graph, Demand shifts right.
Why Demand shifts right
The number of buyers in a market is a determinant of demand. Several thousand arriving students means more renters want units at every monthly rent, so the demand curve shifts right. No new buildings go up and landlords' operating costs are unchanged, so no supply determinant has changed and the supply curve stays put; the extra units rented come from vacancies filling as rents rise.
What happens to the equilibrium
The equilibrium rent rises and the equilibrium quantity of units rented increases.
The mistake students make on this one
A frequent error is to shift supply right as well, since more apartments end up occupied after the campus opens. Those extra occupied units are an increase in quantity supplied drawn out by the higher rent, a movement along a fixed supply curve, because no new buildings were added and landlords' costs did not change.
On exam day
The number of buyers is a demand determinant even in housing questions: shift D right, then read the higher rent and the larger quantity rented off the new intersection instead of touching S.
How this is graded
The checker reads every curve's position before and after your answer. You are marked correct only when Demand shifts right and every other curve on the Supply and Demand graph stays where it started — the same standard an AP reader applies to a drawn graph: the right shift, and nothing extra. There is no AI involved; the rubric is the geometry.
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