1
answer
0
watching
63
views

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

 

  1. In a Free market for rental housing, what is the equilibrium price and quantity?
  2. 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.
  3. 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.
  4. 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?

For unlimited access to Homework Help, a Homework+ subscription is required.

Avatar image
Read by 1 person

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in

Related textbook solutions

Related questions

Weekly leaderboard

Start filling in the gaps now
Log in