Figure: Short and Long Run Shortages Use the figure. At a rent-controlled price of $800, the short-run shortage of apartments is ________ and the long-run shortage is ________.

Question

Figure: Short and Long Run Shortages  Use the figure. At a rent-controlled price of $800, the short-run shortage of apartments is ________ and the long-run shortage is ________.

Quizplus · Accepted Answer

At a rent-controlled price of $800, the quantity demanded of apartments exceeds the quantity supplied, resulting in a short-run shortage of 4,000 apartments. However, in the long run, producers will not be willing to supply as many apartments at the rent-controlled price, resulting in a larger long-run shortage of 12,000 apartments. Therefore, the best choice is B.

Figure: Short and Long Run Shortages Use the Figure