Explain clearly

(c) There is an increase in demand for houses because of migration of Cuban refugees. Graphically, this increase in demand is represented by the rightward shift in the demand curve from D to D'. Since there is no change in the stock of houses (H = 1), the prices of houses shoot up to the level p'. This is a case of excess demand in the housing market. Demand curve after the shock is as follows: p =8-H Calculate increased price by equating the new demand curve (D') with the existing stock of houses. D' = S 8- p=1 p =7 Thus, the new price after the demand shock is _ units. (d) The change in stock, AH is determined by substituting the value of the new price in the flow supply equation. Solving for AH, we get, p' = AH + 2 7 = AH +2 AH = 5 The increase in prices makes the construction of new houses more attractive. Thus, the change in the housing stock, AH is 5. The new size of the housing stock is the summation of the original stock of houses and the change in stock. Calculate the new size of housing stock using the following equation: New size of housing stock = Original stock + AH