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 the rent-controlled price of $800, the quantity demanded of apartments would be 16,000 units and the quantity supplied would be only 4,000 units in the short run, resulting in a shortage of 12,000 units. In the long run, suppliers would respond to the excess demand by increasing the quantity supplied to 16,000 units, resulting in a shortage of 12,000 units again. Therefore, the correct option is B) 4,000 for the short-run shortage and 12,000 for the long-run shortage.

Figure: Short and Long Run Shortages Use the Figure