00:01
In this question, we're asked to consider the same housing market as the previous question, but under a different price control.
00:10
Still a price ceiling, but under a different and lower price.
00:14
Of $300 a month in rent, which i will trace out, and we will call c1.
00:24
You will remember that a price ceiling defines the maximum price of a unit that can be sold on the market.
00:30
And our previous equilibrium, which you can find, still find by the intersection point of our supply and demand curves, sets a price of $450 a month in rent, which is more than our price ceiling, and thus is now unattainable under this new price control.
00:53
So what is the quantity supplied and the quantity demanded under this new price control? well, the quantity supplied can be found at the intersection of c1, our price ceiling, and the supply curve.
01:13
This will set a quantity supplied at 10 ,000 units.
01:18
As suppliers of housing, landlord and homeowners are less incentivized to place their units on the market because they are capped in the price that they can receive for renting.
01:35
This new lower price increases the amount of consumers that are now in the market as a lower price will lead to higher demand...