Figure 4-8 Figure 4-8 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month.
-Refer to Figure 4-8. Suppose that instead of a rent ceiling, the government imposed a price floor of $2,000 per month for apartments. What is the quantity of apartments demanded at the new price?

Question

Figure 4-8  Figure 4-8 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month.
-Refer to Figure 4-8. Suppose that instead of a rent ceiling, the government imposed a price floor of $2,000 per month for apartments. What is the quantity of apartments demanded at the new price?

Quizplus · Accepted Answer

A price floor set above the equilibrium price will result in a surplus, where the quantity demanded is less than the quantity supplied. At a price floor of $2,000, the quantity of apartments demanded is 200.

Figure 4-8 Figure 4-8 Shows the Market for Apartments