ECO 1104 Lecture Notes - Lecture 2: Economic Surplus, Unemployment Benefits, Canada Health Transfer

• School: University of Ottawa
• Department: Economics
• Course: ECO 1104
• Professor: David Gray

Document Summary

Student number : ________________: a price ceiling, consumer surplus, and producer surplus a. D= demand, s= supply: in the absence of rent control, the equilibrium rent is 90 units for the price of . This equilibrium also reflects the equilibrium in the table: with the rent control ceiling at , 100 units are being rented and 80 units are supplied. There is a shortage of apartments because there are more people demanding for a unit, than the amount of units supplied. Thus, the shortage is by 20 units (100-80=20): producer and consumer surplus before the rent control ceiling was placed is identical at. Producer surplus fell after the rent control ceiling was placed, however consumer surplus increased. The producer surplus after is calculated at 000, while the consumer surplus is calculated at 000. The total surpluses after, is less than the total surpluses before the rent control ceiling was placed.