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effects on competition on rent
anyone who is studying business/economics can you help me.... what would happen, say with a shopping centre for example, if there was a rival shopping centre nearby..what would happen with the rent prices? the prices would be more competitive right? in order to draw more potential tenants in? but what would happen if one shopping centre was in a superior location.. i guess they could command more in rent because they are closer to local ammenities, have better shops? am i thinking that out right lol
It depends. If there's only 2 corporations offering retail spaces in shopping centres, then they could collude to keep prices high and maximise industry profits.
Assuming that they don't though, then yes, prices would fall, but the one in the superior location may have higher rental prices still.
Assuming that they don't though, then yes, prices would fall, but the one in the superior location may have higher rental prices still.
You could also say that the price elasticity of demand for the stores in the better shopping centre is relatively inelastic, the demand for it won't change as much if the price goes up. The substitute available is less attractive, therefore the better shopping centre can charge more for the rents.
Rob_K
You could also say that the price elasticity of demand for the stores in the better shopping centre is relatively inelastic, the demand for it won't change as much if the price goes up. The substitute available is less attractive, therefore the better shopping centre can charge more for the rents.
hey sorry off the point here what AS levels are you doing ?
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