How many apartments are constructed

Assignment Help Microeconomics
Reference no: EM13321452

The rent control agency of New York City has found that aggregate demand is

 QD = 100 - 5P

Quantity is measured in tens of thousands of apartments. Price, the average monthly rental rate, is measured in hundreds of dollars. The agency also noted that the increase in Q at lower P results from more three person families corning into the city from Long Island and demanding apartments The city"s board of realtors acknowledges that this is a good demand estimate and has shown that supply is

 Qs 50 + 5P.

a. If both the agency and the board are right about demand and supply, what is the free-market price? What is the change in city population if the agency sets a maximum average monthly rent of $100 and all those who cannot find an apartment leave the city?

b. Suppose the agency bows to the wishes of the board and sets a rental of $900 per month on all apartments to allow landlords a "fair" rate of return. If 50 percent of any long-run increases in apartment offerings comes from new construction, how many apartments are constructed?

Reference no: EM13321452

Questions Cloud

Determine what is the dry unit weight of the sand : A loose, uncompacted sand fill is 2 m in depth and has a relative density of 40%. Laboratory tests indicate that the minimum and maximum void ratio of the sand are 0.46 and 0.90, respectively.
What is the wavelength of the scattered x-rays : An x-ray beam (25 MeV) strikes a proton at rest and scatters the x-rays through an angle of 100 degrees. What is the wavelength of the scattered x-rays
What happens to the free-market price of wheat in the united : Now, suppose the U.s. government wants to buy enough wheat to raise the price to $350 per bushel With this drop in export demand, how much wheat would the government have to buy? How much would this cost the government?
Explain the principles of instrumental analysis : Where can i buy the solutions manual that accompany the 4th or 6th edition of The principles of Instrumental Analysis
How many apartments are constructed : If both the agency and the board are right about demand and supply, what is the free-market price? What is the change in city population if the agency sets a maximum average monthly rent of $100 and all those who cannot find an apartment leave the ci..
Suppose that rather than the declining demand assumed : Suppose that rather than the declining demand assumed in Example 2.7, a decrease in the cost of copper production causes the supply curve to shift to the right by 40 percent. How will the price of copper change?
What is the cross-price elasticity of demand : Where P is the price of the product and Ps is the price of a substitute good. The price of the substitute good is $2.00. a. Suppose P = $1.00. What is the price elasticity of demand? What is the cross-price elasticity of demand?
Make clear the direction of the change in both price : Use supply and demand curve shifts to illustrate the effect of the following events on the market for apples. Make clear the direction of the change in both price and quantity sold
Suppose the government regulates the prices of beef and : Suppose the government regulates the prices of beef and chicken and sets them below their market clearing levels. Explain why shortages of these goods will develop and what factors will determine the sizes of the shortages. What will happen to the pr..

Reviews

Write a Review

Microeconomics Questions & Answers

  What does to the supply or demand of loanable funds

State what, if anything, each of the following does to the supply or demand of loanable funds and to net capital outflows. Draw a complete and fully-labeled diagram of the loanable funds market and net capital outflows to illustrate

  Why the pharmaceutical industry often has the luxury

The pharmaceutical industry often has the luxury of implementing pricing strategies that appear high to consumers. Take a position on the fairness of the industry's approach to pricing pharmaceutical products including offering an alternative stra..

  Kenyas factor of production for their land and labor

What is kenyas factor of production for their land and labor. which means what percentage do they use their land for what.

  Illustrates the economic concept of coke

When Coca Cola introduced a new, low calorie version of Coca Cola called C2, despite a major marketing effort, sales of C2 were weak and by the fall many doubted that the product would last. Coke's experience with C2 illustrates the economic conce..

  What level of q maximizes net benefits

Suppose that the total benefit and total cost from an activity are, respectively, given by the following equations: B(Q) = 150 + 28Q – 5Q2 and C(Q) = 100 + 8Q. (Note: MB(Q) = 28 – 10Q and MC(Q) = 8.)

  Define japanese imports into the united states

Quotas imposed on Japanese imports into the United States tend to: penalize both U.S. consumers and Japanese consumers. benefit both U.S. consumers and Japanese consumers.

  Derive an expression for the inverse demand curve

If the cost of producing Newton’s Donuts is constant at $0.15 per donut, should they reduce the price and thereafter, sell more donuts (assuming profit maximization is the company’s goal)?

  Computing an allocation for a planned socialist

Computing an allocation for a planned socialist economy is prone to great computational difficulties.

  Question about price elasticity

Choose a product and state whether it has price elasticity or price inelasticity. The beginning value for year 2008 is $43,050, year 2007 starting price was $41,450,  and year 2006 beginning price was $42,700.

  Consummate-calculated risk

Describe an example of risk calculation found on the web and what risk calculation technique is illustrated by your example? Would you have employed a different risk assessment technique than used in your example, and why?

  How to know what the consumers may want

During the reading of research data collection tool I select the scanner data system due to the saving and targeted coupons first hand and saving money on discounted items and various products throughout the store .The drawback is when potential ..

  Describe the relation between marginal and average costs

Describe the relation between marginal and average costs.  Describe the relation between marginal and average fixed costs and between marginal and average variable costs and what best accounts for the saying "Too many cooks spoil the broth?"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd