You haven't given any reason to believe that demand would go up. Demand doesn't increase because wealth increases.
Now, you MIGHT see increased demand in some areas! For example, some people who previously lived at home might look for an apartment if they had a higher income. Or people who are currently homeless might move into the housing market.
At the same time, some people would presumably graduate out the top of the lowest-income housing market, and put increased demand on the middle-income market. Or whatever. And of course we might say that it's a huge victory if a bunch of homeless people got out of the vicious cycle of homelessness, even if it does increase housing demand for the working poor.
The problem was not that your example was simplified, it was that it introduced a brand new element (monopoly) to the matter under discussion. If you want to make a simple example that actually shows some kind of demand-increase, rather than illustrating monopoly power, you should do so.
Comments
You haven't given any reason to believe that demand would go up. Demand doesn't increase because wealth increases.
Now, you MIGHT see increased demand in some areas! For example, some people who previously lived at home might look for an apartment if they had a higher income. Or people who are currently homeless might move into the housing market.
At the same time, some people would presumably graduate out the top of the lowest-income housing market, and put increased demand on the middle-income market. Or whatever. And of course we might say that it's a huge victory if a bunch of homeless people got out of the vicious cycle of homelessness, even if it does increase housing demand for the working poor.
The problem was not that your example was simplified, it was that it introduced a brand new element (monopoly) to the matter under discussion. If you want to make a simple example that actually shows some kind of demand-increase, rather than illustrating monopoly power, you should do so.