Figure 4-10 shows the market for apartments in Bay City.Recently,the government imposed a rent ceiling at R0.
-Refer to Figure 4-10.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

Quizplus · Accepted Answer

A price floor set above the equilibrium price (R1) will result in a surplus, where the quantity demanded is less than the quantity supplied. At the price floor of R1, the quantity of apartments demanded is Q1.

Figure 4-10 Shows the Market for Apartments in Bay City