Use the following to answer questions:
Figure: Supply and Demand 5
-(Figure: Supply and Demand 5) Refer to the figure. In the figure, representing a market for apartments, with a rent-controlled price of $800, the long-run supply curve will be ______ elastic than the short-run supply curve, causing the _____.
A) more; shortage to increase to 6,000 apartments
B) more; shortage to decrease to 3,000 apartments
C) less; shortage to increase to 6,000 apartments
D) less; surplus to decrease to 8,000 apartments

Question

Use the following to answer questions:
Figure: Supply and Demand 5 
-(Figure: Supply and Demand 5) Refer to the figure. In the figure, representing a market for apartments, with a rent-controlled price of $800, the long-run supply curve will be ______ elastic than the short-run supply curve, causing the _____.
A) more; shortage to increase to 6,000 apartments 
B) more; shortage to decrease to 3,000 apartments 
C) less; shortage to increase to 6,000 apartments 
D) less; surplus to decrease to 8,000 apartments

Quizplus · Accepted Answer

In the long run, supply is more elastic because producers have more time to adjust to price changes. This increased elasticity leads to a larger shortage as more suppliers exit the market or reduce supply due to the rent control, increasing the shortage to 6,000 apartments.

Use the Following to Answer Questions