The mayor is considering a housing relief program that will reduce the market rate for housing by 25%. They project that this will increase quantity demanded for housing by 25%. Currently, there are 40,000 houses with a market rental rate of $1,000 per month. What will be the increase in consumer surplus due to this program?
The mayor is considering a housing relief program that will reduce the market rate for housing by 25%. They project that this will increase quantity demanded for housing by 25%. Currently, there are 40,000 houses with a market rental rate of $1,000 per month. What will be the increase in consumer surplus due to this program?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The mayor is considering a housing relief program that will reduce
the market rate for housing by 25%. They project that this will
increase quantity demanded for housing by 25%. Currently, there
are 40,000 houses with a market rental rate of $1,000 per month.
What will be the increase in consumer surplus due to this program?
$23,125,000
$11,250,000
$50,000,000
O $5,250,000
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