Consider real estate agents (realtors). For each house sold, they make 6% of the sales price. Consider the two cities: Seattle and Topeka. The median sales price of a home in Seattle is 4x the median sales price of a home in Topeka. However, the realtors in both cities make about the same income. Which concept likely explains this phenomenon?
Group of answer choices
The “Asatur Serardaryan” Inverse Elasticity Theorem
Barriers to entry
Supplier is a price taker
Free entry
Free entry
Explanation: Free entry of new realtors would exhaust any difference in income between these two markets.
Consider real estate agents (realtors). For each house sold, they make 6% of the sales price....