Data on the market demand and market supply of rental apartments in a small college town is provided in the accompanying table.

Suppose that in order to assist tenants, the local government imposed a price ceiling (rent control) on apartments at $1,200 per unit. Would this create a shortage or a surplus? Of how many units? With the price ceiling in place, what would we expect to happen to the quality of rental apartments that are available?

Transcribed Image Text:

Rent $2,000 $1,800 $1,600 $1,400 $1,200 Quantity demanded 5,000 8,000 11,000 14,000 17,000 Quantity supplied 13,000 12,000 11,000 10,000 9,000