Right about demand and supply

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

QD = 160 - 8P.  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 coming 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 = 70 + 7P.

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 rental of $300, and all those who cannot find an apartment leave the city?

Reference no: EM131095084

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