An economist estimates that market demand for apartment in Boulder is Qd = 100 – 5P, with quantity measured in thousands of apartments, and price, the average monthly rental rate, measured in hundreds of dollars. The city’s board of realtors has shown that supply is Qs = 50 + 5P. What is the market price and quantity in terms of apartments in Boulder? Explain what will happen in this market if the city council forces average monthly rental rate to equal $100 (Note: since P, price, is measured in hundreds of dollars, then $100 is P=1).

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Market Equilibrium in the Boulder Apartment Market Demand and Supply Functions Demand Qd 100 5P Quan... View the full answer