The figure above illustrates the current market for apartments in Washington, D.C
a. If the local government imposes a price ceiling of $1,500 per month, is there a shortage? If so, how much? If not, why not?
b. If the local government imposes a price ceiling of $900 per month, is there a shortage? If so, how much? If not, why not?
a. There is not a shortage. The equilibrium rent is $1,200 a month. Because the rent ceiling is above the equilibrium rent, it has no effect.
b. There is a shortage. At a rent of $900 per month, the quantity of units demanded is 100,000 and the quantity of units supplied is 60,000. Hence there is a shortage of 40,000 units.
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The law of one price is not expected to hold for:
A. differentiated goods. B. financial assets. C. oil. D. commodity goods.
The firm's shutdown point occurs at an output of
A. 150.
B. 200.
C. 225.
D. 250.
A carbon tax would increase the total volume of greenhouse gases.
Answer the following statement true (T) or false (F)
Compared to perfect competition, the consumer surplus in a monopoly
A) is unchanged because price and output are the same. B) is lower because price is higher and output is lower. C) is higher because price is higher and output is the same. D) is eliminated.