Prices below the equilibrium price. The excess demand for apartments puts upward pressure on price. Prospective tenants bid up rental rates. Prices above the equilibrium price. The excess supply for apartments puts downward pressure on price.
Landlords try to attract tenants by reducing rental rates.
Competitive markets automatically adjust to equilibrium without central direction. Government establishes laws and rules and individuals decide what, how and for whom to produce. Individuals plan under the market system and markets coordinate the plans. Governments plan under the command system and individuals are obligated to follow the plan. The Price System Assumptions about individual motivation.