Use the figure below to answer the following questions.
Figure 6.1.1
-Refer to Figure 6.1.1.If the demand for rental housing increases and the demand curve shifts rightward from D₀ to D₁,and there is a strictly enforced rent ceiling of $150 per room,

Question

Use the figure below to answer the following questions.

Figure 6.1.1
-Refer to Figure 6.1.1.If the demand for rental housing increases and the demand curve shifts rightward from D₀ to D₁,and there is a strictly enforced rent ceiling of $150 per room,

Quizplus · Accepted Answer

With an increase in demand, the equilibrium quantity of housing rented increases from Q1 to Q2. However, due to the rent ceiling, the price remains at $150, which is below the equilibrium price. This results in excess demand or housing shortage of Q2Q1, which is equal to 500 rooms. Therefore, the number of rooms rented will be 1,500, and there will be a housing shortage of 500 rooms.

Use the Figure Below to Answer the Following Questions