Question

21 question (2 points) imagine that your city decides to enact a rent - control law that limits the price of a one - bedroom apartment to $600 per month. using the table below, answer the following questions. monthly rent quantity demanded quantity supplied $500 800 140 $550 650 210 $600 500 280 $650 350 350 $700 200 420 1st attempt part 1 (1 point) what is the market price without rent control? $ part 2 (1 point) how many one - bedroom apartments will be rented after the rent control law is passed?

Explanation:

Step1: Find equilibrium in free - market

In a free - market, equilibrium occurs when quantity demanded equals quantity supplied. Looking at the table, when the monthly rent is $650, quantity demanded (350) equals quantity supplied (350).

Step2: Determine quantity rented after rent - control

The rent - control law limits the price to $600 per month. At a rent of $600, the quantity supplied is 280. Since the quantity rented is determined by the quantity supplied in a rent - controlled situation (as suppliers are the ones providing the apartments), the number of one - bedroom apartments rented will be 280.

Answer:

Part 1: $650
Part 2: 280