Suppose that in both Britain and the United States, the initial equilibrium price of housing is $200,000. Britain has more severe restrictions on residential development in the short run. Suppose the demand for housing increases by the same amount in the two countries.

a. Draw a set of supply and demand curves showing the effects on housing prices in the short run.

b. The price increase is larger in _________ because that country has a relatively _________ supply curve.

c. Suppose the long-run supply curves in the two countries have the same slope. Show the long-run effects of the increase in demand.

d. In the long run, Britain's Price of housing is ___________ (higher/lower/the same).