An industry analyst asserted in his recent report that the relative scarcity of housing in a particular market leads
to larger than normal increases in price. During the late 1990s, according to the analyst's report, occupancy
rates-a measure of the percentage of housing occupied at a given time-in crowded urban markets such as New
York and San Francisco hovered around 99.5%. During the same period, housing prices increased by as much as
100% per year, compared to more normal past increases in the range of 5% to 15% per year. Which of the
following is an assumption that supports the analyst's assertion?
A. In the housing market, there generally must be at least five buyers per seller in order to cause larger than normal
increases in price.
B. Increases in demand often reflect an influx of new buyers into the marketplace or an unusual increase in buying
power on the part of the customer.
C. The U.S. housing market showed a larger than average increase in the 1990s across the country, not just in
crowded urban areas.
D. Price increases do not cause people to withhold their houses from the market in the hopes that prices will
increase even further in the future.
E. A significant rise in housing prices in a specific area may cause some potential buyers to relocate to other, less
pricey areas.
Please give the reasoning for the answer. Thanks