In the graphs below, we model the rental accommodation markets, bothshort-term(i.e. dwelling the host uses to provide accommodation for a short-term period) andlong-term (i.e. contract of 6 months or more), assuming they are perfectly competitive. Consumers in the short-term market would be tourists, whereas consumers in the long-term market would be residents. Let's try to model the impact short-term rental platforms such as Airbnb might have had on these markets. To do so, let's compare the markets without such platforms (before) and after the platforms have been introduced. In the figures, the vertical axis r is the price (rent), while Q is the quantity of rental accommodation measured in the number of dwellings.

For theshort-termrental market, the [ Select ] ["top-left", "top-right", "bottom-left", "bottom-right"] figure best represents the introduction of short-term rental platforms. Their effect is to cause [ Select ] ["an increase", "a decrease", "neither an increase nor a decrease"] in prices and [ Select ] ["an increase", "a decrease", "neither an increase nor a decrease"] in accommodation, resulting in [ Select ] ["an increase", "a decrease", "neither an increase nor a decrease"] of consumer surplus.

For thelong-termrental market, the [ Select ] ["top-left", "top-right", "bottom-left", "bottom-right"] figure best represents the introduction of short-term rental platforms. Their effect is to cause [ Select ] ["an increase", "a decrease", "neither an increase nor a decrease"] in prices and [ Select ] ["an increase", "a decrease", "neither an increase nor a decrease"] in accommodation, resulting in [ Select ] ["an increase", "a decrease", "neither an increase nor a decrease"] of consumer surplus.

.. . .. . ...... ass............... ......... Before Airbnb Q Q - - - - - After Airbnb