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Chapter 4: Q. 4.12 (page 94)
A city has decided to impose rent controls,and it
has established a rent ceiling below the previous
equilibrium rental rate for offices throughout
the city. How will the quantity of offices leased
by building, owners change?
Decrease.
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The following table depicts the quantity demanded and quantity supplied of studio apartments in a small college town.
What are the market price and equilibrium quantity of apartments in this town? If this town imposes a rent control of $650 per month, how many studio apartments will be rented?
Discuss the essential features of the price system
In 2016,the government ofanation establisheda
price support for wheat.The government's sup
port price has been above the equilibrium price
each year since,and the government has pur
chased all wheat over and above the amounts that
consumers have bought at the support price.
Every year since 2016,there has been an increase
in the number of wheat producers in the market.
No other factors affecting the market for wheat
have changed.Predict what has happened every
year since 2016,to each of the following:
a.Amount of wheat supplied by wheat producers
b.Amount of wheat demanded by all wheat con
sumers
c.Amount of wheat purchased by the government
In recent years, technological improvements have greatly reduced the costs of producing basic cell phones, and a number of new firms have entered the cell phone industry. At the same time, prices of substitutes for cell phones, such as smartphones and some tablet devices, have declined considerably. Construct a supply and demand diagram of the market for cell phones. Illustrate the impacts of these developments, and evaluate the effects on the market price and equilibrium quantity.
Consider Figure 4-3.Suppose that the government
reduces the ceiling price to\(500 per unit.Would
the shortage at the\)500-per-unit ceiling price be
greater than at the$600-per-unit price ceiling?
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