The diagram below shows the market for apartments in a city. Assume that all apartments are identical. FIGURE 5- 4
-Refer to Figure 5- 4. Suppose the government imposes a rent- controlled price of $600 per month on apartments in this city. In the short run we can expect the shortage of apartments to be units.

Question

The diagram below shows the market for apartments in a city. Assume that all apartments are identical.  FIGURE 5- 4
-Refer to Figure 5- 4. Suppose the government imposes a rent- controlled price of $600 per month on apartments in this city. In the short run we can expect the shortage of apartments to be units.

Quizplus · Accepted Answer

The shortage of apartments is the difference between the quantity demanded and the quantity supplied at the rent-controlled price. At a price of $600 per month, the quantity demanded is 1,000 units and the quantity supplied is 700 units. Therefore, the shortage is 1,000 - 700 = 300 units.

The Diagram Below Shows the Market for Apartments in a City