Econ 103 Lecture 8 Jan 30th
-Price ceiling = legal maximum limit on price.
**Note: in the short-run amount of housing is fixed. (rental, not ownership)
***** see notebook for graph ***** ( 1 )
-Initially market is in equilibrium P*, Q*
-government imposes rent ceiling at P(overline)
Impact on the market:
-P(down), Q(supplied) = same
Q(demanded) = goes up
=> shortage of housing.
***** see notebook for table *****