1. Business
  2. Economics
  3. how peht control causes inefficiency suppose the following graph shows...

Question: how peht control causes inefficiency suppose the following graph shows...

Question details

How Peht control causes inefficiency Suppose the following graph shows the demand for, and supply of, apartments in New York City. Determine the equilibrium monthly rent and quantity of apartments in the absence of price controls. Based on this, Then use the purple triangle (diamond symbols) to shade the area representing producer surplus at the equilibrium Aa Aa use the green triangle (triangle symbols) to shade the area representing consumer surplus at the equilibrium rent rent. MONTHLY RENT (Dollars per apartment 3800 CS uppl 3400 PS 3000 2600 2200 Demand 1800 00 0.8 1.6 2.4 3.2 .0 QUANTITY OF APARTMENTS IMillions per month) HelClear AlL Suppose that the government decides to impose a rent control of $2,600 per month on rental apartments in New York City. On the following graph, use the green quadrilateral (triangle symbols) to shade the area representing consumer surplus in the presence of rent control. Use the purple triangle (diamond symbols) to shade the area representing producer surplus after the rent control. Then use the red triangle (cross symbols) to shade the area representing deadweight loss resulting from the rent control. MONTHLY RENT Dollars per apartment
Suppose that the government decides to impose a rent control of $2,600 per month on rental apartments in New York City. On the following graph, use the green quadrilateral (triangle symbols) to shade the area representing consumer surplus in the presence of rent control. Use the purple triangle (diamond symbols) to shade the area representing producer surplus after the rent control. Then use the red triangle (cross symbols) to shade the area representing deadweight loss resulting from the rent control MONTHLY RENT (Dollars per apartment 3800 CS w/ Rent Control 3400 PS w/ Rent Control 3000 Deadweight Loss 2600 2200 Dernand 1800 0.0 0.8 16 2.4 3.2 4.0 QUANTITY OF APARTMENTS Millins per month) Hle Glem All In the presence of the rent control, consumer surplus increases by producer surplus decreases by per month and per month, The price ceiling on rent causes per month of deadweight loss. Tool tip: Mouse over the shaded regions in the graph to see their areas Which of the following are generally true of rent control? Check all that apply Everyone who can afford the rent can find an apartment immediately. The price ceiling represents the total opportunity costs of consumers from renting an apartment. □ The quantity of available rental apartments falls. Misallocation of apartments occurs. The quality of rental apartments improves
Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution