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So I'm reading Varian intermediate microeconomics and in chapter one it's about housing. Suppose we have a inner ring and a outer ring in a city where there is a university. In the inner ring supply is limited and everyone who can't afford it or whos reservation price is too low, moves to the outer ring.

Suppose we have a intersection of supply and demand. Now there the price should be set.

But why not increase the price for a subset of the houses since not everyone has the same reservation price couldn't you price housing in a way that everyone get's a house for his reservation price and no dollar less?

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  • $\begingroup$ This is discussed in chapter one (subchapter 1.7), keep reading! $\endgroup$ – Giskard Jun 10 at 6:52
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    $\begingroup$ I'm voting to close this question so that we do not rob the OP from the joy of reading. $\endgroup$ – Giskard Jun 10 at 6:53
  • $\begingroup$ I just arrived there. reading about the discriminating monopolist. But why aren't landlords doing this anyway ? I mean they are in some way the discriminating monopolist over their own home. $\endgroup$ – Christian Singer Jun 10 at 7:46

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