Question

egin{tabular}{|c|c|c|} hline egin{tabular}{c} Rent \ (per month) end{tabular} & egin{tabular}{c} Quantity \ Demanded end{tabular} & egin{tabular}{c} Quantity \ Supplied end{tabular} \ hline( $ 500 ) & 375000 & 225000 \ hline( $ 600 ) & 350000 & 250000 \ hline( $ 700 ) & 325000 & 275000 \ hline( $ 800 ) & 300000 & 300000 \ hline( $ 900 ) & 275000 & 325000 \ hline( $ 1000 ) & 250000 & 350000 \ hline end{tabular} (a) What is the equilibrium rent and what is the equilibrium quantity of apartments rented? Sketch a demand and supply graph of the market for apartments to illustrate your answer. (2 marks) (b) Suppose the government sets a ceiling on rents of ( $ 600 ) per month. Will this create a shortage or a surplus? Explain why and show on your diagram. (3 marks)

          egin{tabular}{|c|c|c|}
hline egin{tabular}{c} 
Rent \
(per month)
end{tabular} & egin{tabular}{c} 
Quantity \
Demanded
end{tabular} & egin{tabular}{c} 
Quantity \
Supplied
end{tabular} \
hline( $ 500 ) & 375000 & 225000 \
hline( $ 600 ) & 350000 & 250000 \
hline( $ 700 ) & 325000 & 275000 \
hline( $ 800 ) & 300000 & 300000 \
hline( $ 900 ) & 275000 & 325000 \
hline( $ 1000 ) & 250000 & 350000 \
hline
end{tabular}
(a) What is the equilibrium rent and what is the equilibrium quantity of apartments rented? Sketch a demand and supply graph of the market for apartments to illustrate your answer.
(2 marks)
(b) Suppose the government sets a ceiling on rents of ( $ 600 ) per month. Will this create a shortage or a surplus? Explain why and show on your diagram.
(3 marks)

egintabular|c|c|c|
hline egintabularc
Rent (per month)
endtabular egintabularc
Quantity Demanded
endtabular egintabularc
Quantity Supplied
endtabular hline( 500 ) 375000 225000 hline( 600 ) 350000 250000 hline( 700 ) 325000 275000 hline( 800 ) 300000 300000 hline( 900 ) 275000 325000 hline( 1000 ) 250000 350000 hline
endtabular
(a) What is the equilibrium rent and what is the equilibrium quantity of apartments rented? Sketch a demand and supply graph of the market for apartments to illustrate your answer.
(2 marks)
(b) Suppose the government sets a ceiling on rents of ( 600 ) per month. Will this create a shortage or a surplus? Explain why and show on your diagram.
(3 marks)

Added by Ali A.

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