Figure 4-5 Figure 4-5 shows the market for apartments in Bay City.Recently,the government imposed a rent ceiling at R₀.
-Refer to Figure 4-5.Suppose that instead of a price ceiling,the government imposed a price floor of R₁.What is the quantity of apartments demanded at the new price?

Question

Figure 4-5 Figure 4-5 Figure 4-5 shows the market for apartments in Bay City.Recently,the government imposed a rent ceiling at R0. -Refer to Figure 4-5.Suppose that instead of a price ceiling,the government imposed a price floor of R1.What is the quantity of apartments demanded at the new price? A) 0 B) Q1 C) Q* D) Q0

Figure 4-5 Figure 4-5 shows the market for apartments in Bay City.Recently,the government imposed a rent ceiling at R<sub>0</sub>. -Refer to Figure 4-5.Suppose that instead of a price ceiling,the government imposed a price floor of R<sub>1</sub>.What is the quantity of apartments demanded at the new price? A) 0 B) Q<sub>1</sub> C) Q* D) Q<sub>0</sub>

Figure 4-5 shows the market for apartments in Bay City.Recently,the government imposed a rent ceiling at R₀.
-Refer to Figure 4-5.Suppose that instead of a price ceiling,the government imposed a price floor of R₁.What is the quantity of apartments demanded at the new price?

Quizplus · Accepted Answer

A price floor set above the equilibrium price (as indicated by R₁) would lead to a surplus of apartments, as the quantity supplied at this price (Q₁) would exceed the quantity demanded. The quantity of apartments demanded at this new price would still be at the equilibrium quantity (Q*), but since the question specifically asks for the quantity demanded at the new price, it refers to the quantity supplied at that price, which is not directly affected by the price floor. The correct interpretation based on the question's phrasing is that it asks for the quantity that would be supplied at this price, assuming suppliers are willing to supply that much, even though it might not actually be sold due to the lower demand at that price point.

Figure 4-5 Figure 4-5 Shows the Market for Apartments