The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 18

The following paragraph is condensed from a long letter to the editor of a metropolitan newspaper: If you want to make money real fast, buy a mobile home park. You can raise the rents to your heart's content, because the tenants usually can't afford to move. And even if they could, there is usually no place to go, since there aren't enough mobile home parks to take care of all the people who own mobile homes.
(a) If the situation is as dire for owners of mobile homes as the letter writer says, what will already have happened to the purchase price of mobile home parks? Do owners of such parks make huge profits from renting space to mobile home owners?
(b) If existing mobile home parks can be operated very profitably or sold for very high prices, why don't entrepreneurs create more such parks?
(c) If the city responds to the complaint of this letter writer and others by putting price controls on the rental rates mobile home parks may charge, what will happen to the price of mobile homes currently occupying rent-controlled sites?