Suppose in the market for apartments in Seattle the equilibrium price is $1000 a month
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Suppose in the market for apartments in Seattle the equilibrium price is $1000 a month
and the equilibrium quantity is 50,000. Now assume, due to rising apartment rates, the
government puts a price ceiling in place which does not allow the price of apartments to
rise above $800 a month. At $800 a month, landlords supply 40,000 apartments and
consumers would like to purchase 70,000 apartments. Provide a graphical analysis of the effects of a price ceiling on consumer surplus, producer surplus and total welfare. Shade in the area that represents the deadweight loss.
10 years ago
Suppose in the market for apartments in Seattle the equilibrium price is $1000 a month
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