Figure 4-10
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.With rent control,the quantity supplied is Q₁.Suppose apartment owners ignore the law and rent this quantity for the highest rent they can get.What is the highest rent they can get?

Question

Figure 4-10
  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.With rent control,the quantity supplied is Q₁.Suppose apartment owners ignore the law and rent this quantity for the highest rent they can get.What is the highest rent they can get?

Quizplus · Accepted Answer

The highest rent that apartment owners can get when they ignore the law and rent Q₁ (the quantity supplied with rent control) is represented by point A on the supply curve, which intersects the demand curve at point B. The corresponding rent at point B is R₁, which is the highest possible rent when Q₁ is supplied. Thus, the correct answer is B.

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