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Guilibrium pric Santa Monica on your graph in Santa Monica has the following 3. Suppose that the supply curve for a 2 bedroom

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Answer #1

A)The equilibrium will at where demand equals to supply,

0.5p=3500-0.5p

1p=3500

P*=3500

Q*=0.5p=0.5*3500=1750

25ool

B)The shortage at price ceiling=2000 ,is,

Shortage=Quantity demanded- quantity supplied=Qd-Qs

Qs=0.5*2000=1000

Qd=3500-0.5*2000=2500

Shortage=2500-1000=1500

Demand Supply 350of A shortase 2000

C) willingness to pay by consumer for Q=1000,is

1000-3500=-0.5p

P=2500*2=5000

Deadweight loss=1/2*(5000-2000)*(1750-1000)=1500*750=1,125,000

Demand 2 Deadweish Hoss Supply x Shortage oxy

D)The objective is of rent control is to provide land at lower cost. But due to lower prices there would be shortage then most of the people couldn't get the land .Then there only few people get the land who are relative of seller or close friends.so these will instead of helping,make things more worse. So i don't support rent control.

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