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Given the Apartments supply and demand schedules table below:
MONTHLY RENT
APARTMENTS DEMANDED
APARTMENTS SUPPLIED
$2500
10,000
15,000
$2000
12,500
$1500
$1000
17,500
7,500
$500
20,000
5,000
What is the market of equilibrium rental price per month and the market equilibrium number of apartments demanded and supplied? If the local government can enforce a rental-control law that sets the maximum monthly rent at $1500. Will there be a surplus or shortage? Of how many units? How many Units will be rented each month?
Assume that demand remains unchanged, by how many units of housing would the government have to increase the supply of housing in order to get the market equilibrium rental price to fall to $1500/month, $1000/month and $500/month?
What is te equilibrium? At what price is there neither a shortage nor a surplus? fill in the surplus-shortage column and use it to confirm your answers.
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