Asked by Derise Major on Jul 28, 2024
Verified
(Table: Market for Apartments) Use Table: Market for Apartments.If a price ceiling of $700 is imposed on this market,the result will be an inefficiency in the form of a _____ million apartments.
A) surplus of 0.6
B) shortage of 0.6
C) surplus of 0.2
D) shortage of 0.2
Price Ceiling
A legal maximum price that can be charged for a good or service, typically set by government.
Market for Apartments
The economic interaction of supply and demand determining the rental prices and availability of apartment units.
- Absorb the doctrines and outcomes of price regulation, especially ceilings and floors, affecting markets for goods and services.
- Discern the outcomes related to the establishment of price ceilings, focusing on market efficiency and the welfare of consumers and producers amidst shortages.
Verified Answer
ZK
Zybrea KnightAug 03, 2024
Final Answer :
B
Explanation :
Looking at the table, we can see that at a price ceiling of $700, the quantity demanded is 4 million apartments, while the quantity supplied is only 3.4 million apartments. This means there is a shortage of 0.6 million apartments (4 - 3.4 = 0.6).
Learning Objectives
- Absorb the doctrines and outcomes of price regulation, especially ceilings and floors, affecting markets for goods and services.
- Discern the outcomes related to the establishment of price ceilings, focusing on market efficiency and the welfare of consumers and producers amidst shortages.
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