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14 Feb 2020
Consider the market for rental housing in Your town. The demand and supply schedules for rental housing are given in the table.
Price
($ per month)
Quantity Demanded (thousands of units)
Quantity Supplied
(thousands of units)
1100
40
80
1000
50
77
900
60
73
800
70
70
700
80
67
600
90
65
500
100
60
- In a Free market for rental housing, what is the equilibrium price and quantity?
- Now suppose the government in Your town decides to impose a ceiling on the monthly rental price. What is the highest level at which such a ceiling could be set in order to have any effect on the marker? Explain your answer.
- Suppose the maximum rental price is set equal to $500 per month. Describe the effect on quantity demanded, supplied, and exchanged in the rental-housing market.
- Suppose a black market develops in the presence of the rent controls in part (c). What is the black market price that would exist if all of the quantity supplied were sold on the black market?
Consider the market for rental housing in Your town. The demand and supply schedules for rental housing are given in the table.
Price ($ per month) |
Quantity Demanded (thousands of units) |
Quantity Supplied (thousands of units) |
1100 |
40 |
80 |
1000 |
50 |
77 |
900 |
60 |
73 |
800 |
70 |
70 |
700 |
80 |
67 |
600 |
90 |
65 |
500 |
100 |
60 |
- In a Free market for rental housing, what is the equilibrium price and quantity?
- Now suppose the government in Your town decides to impose a ceiling on the monthly rental price. What is the highest level at which such a ceiling could be set in order to have any effect on the marker? Explain your answer.
- Suppose the maximum rental price is set equal to $500 per month. Describe the effect on quantity demanded, supplied, and exchanged in the rental-housing market.
- Suppose a black market develops in the presence of the rent controls in part (c). What is the black market price that would exist if all of the quantity supplied were sold on the black market?
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erinhare45Lv2
2 Jun 2021