In many cities, firms that own office buildings can renovate them for use as residential apartments. According to a news story, in many cities "residential rents are surpassing office rents." Source: Eliot Brown, "Developers Turn Former Office Buildings Into High-End Apartments," Wall Street Journal, May 7, 2014. The response to an increase in residential rents would be A. a decrease in the supply of office space, shifting it to the right. B. an increase in the supply of office space, shifting it to the left. C. an increase in the supply of office space, shifting it to the right. D. a decrease in the supply of office space, shifting it to the left.

The response to an increase in residential rents would be a decrease in the supply of office space, shifting it to the left.

Explanation:

While some legislation aims to shield renters from dramatic rentals – or at least legislation that tends to minimize the blow – we are mainly in the will of certain property owners.

Fortunately, tenants can not rent whatever time they choose. They need to wait lawfully for the end of your contract. When a one-year lease has been signed, they will wait a full year before demanding more rent. The same is valid for a two-year loan (and so on). However, if you lease a month by month, a tenant is allowed legally to raise the rent at either the end of every month, if they like.

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