The question requires us to determine the number of apartments offered for rent 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, 180,000 apartments will be offered for rent when the government sets a price ceiling of $400.
Option “c” 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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