Macmillan Learning The city of Walnut, CA recently passed a bill to subsidize contractors to build...

 

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© Macmillan Learning The city of Walnut, CA recently passed a bill to subsidize contractors to build more housing in the area. These bills are part an initiative to help make housing more affordable in the area. The bill offers those approved in initial application rounds a subsidy of $200,000 per home built. Demonstrate the effect of these subsidies on the market for housing in Walnut, and answer the questions below. Price (in thousands of $) 1,000 900 Supply 800 700 600 500 400 300 200 100 0 Demand 0 1 2 3 4 5 9 7 8 9 10 11 12 13 14 15 Quantity of homes (in thousands) © Macmillan Learning The city of Walnut, CA recently passed a bill to subsidize contractors to build more housing in the area. These bills are part an initiative to help make housing more affordable in the area. The bill offers those approved in initial application rounds a subsidy of $200,000 per home built. Demonstrate the effect of these subsidies on the market for housing in Walnut, and answer the questions below. Price (in thousands of $) 1,000 900 Supply 800 700 600 500 400 300 200 100 0 Demand 0 1 2 3 4 5 9 7 8 9 10 11 12 13 14 15 Quantity of homes (in thousands)

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To demonstrate the effect of the subsidies on the market for housing in Walnut we need to analyze the changes in supply and demand 1 Initially lets assume that the market for housing in Walnut was in ... View the full answer