Figure 4-5 Figure 4-5 shows the market for apartments in Bay City.Recently,the government imposed a rent ceiling at R0.
-Refer to Figure 4-5.Suppose that instead of a price ceiling,the government imposed a price floor of R1.What is the quantity of apartments demanded at the new price?

Question

Figure 4-5  Figure 4-5 shows the market for apartments in Bay City.Recently,the government imposed a rent ceiling at R0.
-Refer to Figure 4-5.Suppose that instead of a price ceiling,the government imposed a price floor of R1.What is the quantity of apartments demanded at the new price?

Quizplus · Accepted Answer

A price floor set at R1, which is above the equilibrium price, will result in a lower quantity demanded than at equilibrium. At this higher price, the quantity demanded will be Q1.

Figure 4-5 Figure 4-5 Shows the Market for Apartments