Rent control. Demand for apartments in Curtisville is D x = 1500 − 5 x , and supply is S x = 600 + 10 x , where x is the number of apartments, in hundreds, and D(x) and S(x) are the rent in dollars per month, per apartment. a) Find the equilibrium point. b) Find the consumer surplus and producer surplus at the equilibrium point. c) Suppose a maximum rent of $1000 per month is imposed by the city council. Find the point ( x C , p C ) . d) Find the new consumer surplus and new producer surplus. e) Find the deadweight loss.
Rent control. Demand for apartments in Curtisville is D x = 1500 − 5 x , and supply is S x = 600 + 10 x , where x is the number of apartments, in hundreds, and D(x) and S(x) are the rent in dollars per month, per apartment. a) Find the equilibrium point. b) Find the consumer surplus and producer surplus at the equilibrium point. c) Suppose a maximum rent of $1000 per month is imposed by the city council. Find the point ( x C , p C ) . d) Find the new consumer surplus and new producer surplus. e) Find the deadweight loss.
Solution Summary: The author explains the equilibrium point, which is (x)=1500-5x and the supply function = 600+10x
Rent control. Demand for apartments in Curtisville is
D
x
=
1500
−
5
x
, and supply is
S
x
=
600
+
10
x
, where
x
is the number of apartments, in hundreds, and D(x) and S(x) are the rent in dollars per month, per apartment.
a) Find the equilibrium point.
b) Find the consumer surplus and producer surplus at the equilibrium point.
c) Suppose a maximum rent of $1000 per month is imposed by the city council. Find the point
(
x
C
,
p
C
)
.
d) Find the new consumer surplus and new producer surplus.
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