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Suppose that there are thousand one bedroom apartments in a small town and that this number is fixed. The table gives the quantity demand in the market for one bedroom apartments.
PRICE
DEMAND
500
1600
600
1400
700
1200
800
1000
900
400
A) What is the equilibrium rental for a one bedroom apartment?
B) Suppose 200 new apartments are constructed. What happens to the equilibrium rent?
C) Suppose more people move to the town increasing demand by 200 units at each price. What is the new equilibrium price keeping supply fixed at 1200 units?
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