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 the market is unregulated, the number of rooms rented is
A)1,500, and the rent rises to $200 a month.
B)2,000, and the rent is at its initial level.
C)1,750, and the rent rises to $175 a month.
D)2,000, and the rent rises to $200 a month.
E)1,750, and the rent rises to $200 a month.

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 the market is unregulated, the number of rooms rented is
A)1,500, and the rent rises to $200 a month. 
B)2,000, and the rent is at its initial level. 
C)1,750, and the rent rises to $175 a month. 
D)2,000, and the rent rises to $200 a month. 
E)1,750, and the rent rises to $200 a month.

Quizplus · Accepted Answer

When the demand increases and the market is unregulated, the equilibrium point shifts from E₀ to E₁. At E₁, the quantity of rental housing rented increases to 1,750, while the rent rises to $175 a month. This is shown by point A₁ on the graph. Thus, the best choice is C.

Use the Figure Below to Answer the Following Questions