Question

The demand for apartments is P = 1200 - Q while the supply is P = Q units. The government imposes rent control at P = $300/ month. Suppose demand grows in the market to P = 1400 - Q.
a. How is excess demand affected by the growth in demand for apartments?
b. At what price would the government have to set the rent control to keep excess demand at the same level as prior to the growth in demand?



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  • CreatedDecember 12, 2014
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