The question requires us to determine the quantity demanded of apartments at the
Explanation of Solution
At the
Equilibrium rent = $500 per month
The
The government sets a price ceiling of $400. At the price ceiling, consumers are willing to purchase 220,000 units of apartments while the producers are willing to sell 180,000 units of apartments.
At a price ceiling of $400 rent per month,
Quantity demanded = 220,000 units
Quantity supplied = 180,000 units
Thus, when the government sets a price ceiling at $400, a total of 220000 units of apartments will be demanded by the consumers.
Option “e” is correct.
The price ceiling is the price set by the government to regulate the market. It is the maximum price a seller can charge for the goods and services. Generally, the price ceiling lies below the
Chapter 2R Solutions
Krugman's Economics For The Ap® Course
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