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1. You have been given the following information about the housing market for two bedroom rental...

1. You have been given the following information about the housing market for two bedroom rental units in Vancouver: Rent Quantity Demanded Quantity Supplied (dollars per month) (per month) (per month) 1,100 20,000 0 1,200 15,000 5,000 1,300 10,000 10,000 1,400 5,000 15,000 1,500 2,500 20,000 1,600 1,500 25,000 Hand draw a supply and demand graph to illustrate the housing market above

. a) What is the equilibrium rental price? ____________________

b) What is the equilibrium quantity of housing?________________________

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Answer #1
Rent Quantity demanded Quantity supplied
1100 20000 0
1200 15000 5000
1300 10000 10000
1400 5000 15000
1500 2500 20000
1600 1500 25000

a. The equilibrium is where the quantity demand equals the quantity supplied. Note that the quantity demanded and quantity supplied are equal at a rent equal to $1300, and thus the equilibrium rental price is $1300.

b. The corresponding equilibrium quantity of housing is 10,000 housing units.

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