Use the black point (plus symbol) to indicate the equilibrium monthly rent and quantity of apartments in the absence of price controls. Then use the green point (triangle symbol) to fill the area representing consumers' surplus, and use the purple point (diamond symbol) to fill the area representing producers' surplus. MONTHLY RENT (Dollars per apartment) 2800 2600 2400 2200 2000 1800 0 Demand Supply 0.8 3.2 QUANTITY OF APARTMENTS (Millions per month) 1.6 24 4.0 Equilibrium A CS PS Suppose that the government decides to impose a rent control of $2,100 per month on rental apartments in New York City. On the following graph, use the green point (triangle symbol) to shade the area representing consumers' surplus in the presence of rent control. Use the purple point (diamond symbol) to shade the area representing producers' surplus after the rent control. Then use the grey point (star symbol) to shade the area representing deadweight loss resulting from the rent control.

Use the black point (plus symbol) to indicate the equilibrium monthly rent and quantity of apartments in the absence of price controls. Then use the green point (triangle symbol) to fill the area representing consumers' surplus, and use the purple point (diamond symbol) to fill the area representing producers' surplus. MONTHLY RENT (Dollars per apartment) 2800 2600 2400 2200 2000 1800 0 Demand Supply 0.8 3.2 QUANTITY OF APARTMENTS (Millions per month) 1.6 24 4.0 Equilibrium A CS PS Suppose that the government decides to impose a rent control of $2,100 per month on rental apartments in New York City. On the following graph, use the green point (triangle symbol) to shade the area representing consumers' surplus in the presence of rent control. Use the purple point (diamond symbol) to shade the area representing producers' surplus after the rent control. Then use the grey point (star symbol) to shade the area representing deadweight loss resulting from the rent control.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Not sure if what I have is correct and don’t know what to put for the rest of the problems and don’t know where to put CS, PS, CS and PS w/ rent control and deadweight loss

Suppose the following graph shows the demand for, and supply of, apartments in New York City.
Use the black point (plus symbol) to indicate the equilibrium monthly rent and quantity of
apartments in the absence of price controls. Then use the green point (triangle symbol) to fill the
area representing consumers' surplus, and use the purple point (diamond symbol) to fill the area
representing producers' surplus.
MONTHLY RENT (Dollars per apartment)
2800
2600+
2400
2200
2000
1800
0
Demand
Supply
0.8
3.2
QUANTITY OF APARTMENTS (Millions per month)
1.6
24
14.0
Equilibrium
A
CS
PS
Suppose that the government decides to impose a rent control of $2,100 per month on rental
apartments in New York City. On the following graph, use the green point (triangle symbol) to
shade the area representing consumers' surplus in the presence of rent control. Use the purple
point (diamond symbol) to shade the area representing producers' surplus after the rent control.
Then use the grey point (star symbol) to shade the area representing deadweight loss resulting
from the rent control.
K

Suppose that the government decides to impose a rent control of $2,100 per month on rental
apartments in New York City. On the following graph, use the green point (triangle symbol) to
shade the area representing consumers' surplus in the presence of rent control. Use the purple
point (diamond symbol) to shade the area representing producers' surplus after the rent control.
Then use the grey point (star symbol) to shade the area representing deadweight loss resulting
from the rent control.
MONTHLY RENT (Dollars per apartment)
2800
2600
2400
2200
2000
1800
0
Demand
Rent Celling
I
Supply
0.8
3.2
QUANTITY OF APARTMENTS (Millions per month)
1.6
2.4
graph to see their areas.
40
CS w/ Rent Control
◇
PS w/ Rent Control
XX
Deadweight Loss
In the presence of the rent control, consumers' surplus decreases by $240 million per
month and producers' surplus decreases by
per month. The price ceiling on rent
causes
per month of deadweight loss. Tool tip: Click on the shaded regions in the
Which of the following are generally true of rent control? Check all that apply.
All consumers gain from rent control.
Everyone who needs a place to live can rent an apartment.
The quantity of available rental apartments increases.
The quality of rental apartments falls.
Non-price methods of rationing emerge.

Definition Definition Cost to society created by market inefficiency when supply and demand are not in market equilibrium.

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