Question

Suppose that the demand and supply schedules for rental apartments in the city of Gotham are as given in the table below.

Instructions: Enter your answers as whole numbers.

a. What is the market equilibrium rental price per month and the market equilibrium number of apartments demanded and supplied?

     Market equilibrium rental price is:

     Market equilibrium quantity is:

b. If the local government can enforce a rent-control law that sets the maximum monthly rent at $1,500, will there be a surplus or a shortage?

       (Click to select)   Surplus   Shortage

     Of how many units?

     How many units will actually be rented each month?

c. Suppose that a new government is elected that wants to keep out the poor. It declares that the minimum rent that can be charged is $2,500 per month. If the government can enforce that price floor, will there be a surplus or a shortage?

       (Click to select)   Surplus   Shortage

     Of how many units?

     How many units will actually be rented each month?

Answer 1

A) "according to the table below, rent in dollar

The market equilibrium apartment rental be 2000 $because in this rent price where demand and supply same

Qd=12500

Qs=12500

b)if the local government enforce to sets the maximum monthly rent at $1,500 result in shortage of apartments because the demand of apartments 15000and supply is 10000 result in shortage of( 15000_10000)=5000

C) if the new government is elected and declare minimum price of rent apartment is 2500$ result will be in surplus. Because in that case demand is 10000 and supply will be 15000 So result in surplus of 5000(15000-10000)

Actually units rented each month= 10,000 apartments (the apartments demanded by tenants at price of $2500)