Only one equilibrium rent

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Reference no: EM138131

Q. a) Draw the supply and demand for apartments. Assume in this market all apartments are identical, so there is only one equilibrium rent ("price" of an apartment). Show the rent as $800 per month.

b) Show the effect of a law preventing landlords from raising rent above $700. Does this cause a shortage or surplus? Is this a price floor or a price ceiling? How would a law preventing landlords from charging above $900 give different results. What is such a price restriction called?

Reference no: EM138131

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