The figure to the right shows the market for one-bedroom apartments in Calgary. If this market is initially unregulated, thousand units will rent for a price of $ per month. Suppose however, the city imposes the controlled price shown in the figure. In this case, in the short run, the market experiences an excess thousand units. In the long run, if the controlled price remains in place, the market will show a of thousand units. This analysis indicates that as time passes, rent controls will cause housing shortages to Rental Price ($ per month) 945 645 520 Rental Housing Market Sshort run Slong run Controlled Price 18 38 45 Quantity of Rental Units (Thousands) D Q Q
The figure to the right shows the market for one-bedroom apartments in Calgary. If this market is initially unregulated, thousand units will rent for a price of $ per month. Suppose however, the city imposes the controlled price shown in the figure. In this case, in the short run, the market experiences an excess thousand units. In the long run, if the controlled price remains in place, the market will show a of thousand units. This analysis indicates that as time passes, rent controls will cause housing shortages to Rental Price ($ per month) 945 645 520 Rental Housing Market Sshort run Slong run Controlled Price 18 38 45 Quantity of Rental Units (Thousands) D Q Q
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter13: Between Competition And Monopoly
Section: Chapter Questions
Problem 5DQ
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