-The above figure shows the market for 2-bedroom townhouses in Canberra. If a rent ceiling is set at $1,000 per month, what is the maximum rent someone is willing to pay in the black market?

Question

Quizplus · Accepted Answer

The maximum rent someone is willing to pay in the black market would be at the equilibrium point where supply and demand meet, which is typically higher than the rent ceiling. Since the rent ceiling is artificially set below the equilibrium price, it creates a shortage, leading to a higher willingness to pay in the black market to secure a townhouse. Without the specific supply and demand curves provided, the correct answer would logically be the highest rent listed above the rent ceiling, which is $1,300 per month.

-The Above Figure Shows the Market for 2-Bedroom Townhouses in Canberra