Question

Suppose demand for apartments in Honolulu is P=6600-0.5q and supply is P=0.25q. Derive the equilibrium price...

  1. Suppose demand for apartments in Honolulu is P=6600-0.5q and supply is P=0.25q. Derive the equilibrium price and quantity for apartments. Show on a graph.  Calculate the producer and consumer surplus. If the city of Honolulu passes a rent control, forcing a rent (or price) ceiling equal to $1800, what is the quantity supplied, quantity demanded, and the shortage?  Calculate the new consumer surplus, producer surplus, and deadweight loss, and show these on your graph. If a black market develops after the rent control, allowing landlords to charge an illegal rent, what is the highest rent that they could charge for the quantity supplied of apartments in part b?   What is the new producer surplus?  Comment on the effectiveness of price controls in allocating apartments to middle to lower income tenants.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose demand for apartments in Honolulu is P=6000-0.5q and supply is P=0.25q. a. Derive the equilibrium...
Suppose demand for apartments in Honolulu is P=6000-0.5q and supply is P=0.25q. a. Derive the equilibrium price and quantity for apartments. Show on a graph. Calculate the producer and consumer surplus. b. If the city of Honolulu passes a rent control, forcing a rent (or price) ceiling equal to $1600, what is the quantity supplied, quantity demanded, and the shortage? Calculate the new consumer surplus, producer surplus, and deadweight loss, and show these on your graph. c. If a black...
A monopoly is facing inverse demand given by P = 40−0.5Q and marginal cost given by...
A monopoly is facing inverse demand given by P = 40−0.5Q and marginal cost given by MC = 7+0.1Q. Illustrate these on the graph and answer the questions below. (a) If the monopolist is unable to price discriminate, what is the profit-maximizing quantity? What is the price? What is consumer surplus? Producer surplus? Deadweight loss? (b) Suppose instead the monopolist is able to perfectly price discriminate. How many units will be sold? What is consumer surplus? Producer surplus? Deadweight loss?
Demand for Dok P=60-0.5Q supply P=12+0,5Q 1.what is the equilibrium price, quantity, consumer surplus and producer...
Demand for Dok P=60-0.5Q supply P=12+0,5Q 1.what is the equilibrium price, quantity, consumer surplus and producer surplus. 2.suppose the demand curve increases by 12 unit at given price. Hold everything constant, what is new equilibrium price, quantity, consumer surplus and producer surplus. 3.use the original demand and supply curve in part one. assume economy can trade with world for 12 unit. What is the market price for local consumers if the world price is 24. What is price local producer...
The inverse Demand is given by: P=30-0.25Q and the inverse supply is given by: P=0.5Q-30. If...
The inverse Demand is given by: P=30-0.25Q and the inverse supply is given by: P=0.5Q-30. If a Price Floor of $12 is imposed, then Consumer Surplus and DWL are: (Hint: it helps to draw a graph for this question) Select one: a. CS=1728; DWL = 12 b. CS=648; DWL = 12 c. CS=1600; DWL = 6 d. CS=648; DWL = 24 e. None of the above
2. The demand and supply functions for rental accommodation in Metroland are as follows: Qd =120-P...
2. The demand and supply functions for rental accommodation in Metroland are as follows: Qd =120-P Qs = 2P a. Solve for the competitive equilibrium rental rate (P) and quantity (Q) of rental units in Metroland. Illustrate this equilibrium in a graph. On your graph, show the regions that represent consumer surplus and producer surplus. Calculate the value of consumer surplus, producer surplus, and overall welfare. b. Suppose the City of Metroland enacts a rent control ordinance that imposes a...
Suppose the equilibrium price of gasoline is $3 per gallon. a. Using the demand and supply...
Suppose the equilibrium price of gasoline is $3 per gallon. a. Using the demand and supply graph, draw this equilibrium in the space below. Make this graph large, it will be used for future questions. b. Now suppose the government imposes a binding price ceiling on this market. Identify a value for this price ceiling that would be binding and show it on the graph. Graphically show whether excess demand or excess supply would result. c. With the price ceilings,...
2. The demand and supply functions for rental accommodation in Metroland are as follows: Qd =...
2. The demand and supply functions for rental accommodation in Metroland are as follows: Qd = 120 - P Qs = 2P a. Solve for the competitive equilibrium rental rate (P) and quantity (Q) of rental units in Metroland. Illustrate this equilibrium in a graph. b. On your graph, show the regions that represent consumer surplus and producer surplus. Calculate the value of consumer surplus, producer surplus, and overall welfare. c. Suppose the City of Metroland enacts a rent control...
The demand and supply functions for a certain product are given by p=150-0.5q and p=0.002q2+1.5, where...
The demand and supply functions for a certain product are given by p=150-0.5q and p=0.002q2+1.5, where p is in dollars and q is the number of items. (a) Which is the demand function? (b) Find the equilibrium price and quantity (c) Find the total gains from trade at the equilibrium price. with its demand and supply functions, suppose the price is set artificially at $70 (which is above the equilibrium price). (d) Find the quantity supplied and the quantity demanded...
Assume that the diagram below describes the apartment market in Newark. Part 1: Suppose that the...
Assume that the diagram below describes the apartment market in Newark. Part 1: Suppose that the government decides to impose rent control in the amount of $600. Draw the price ceiling line. Part 2: Use drop lines to indicate the quantity demanded (Q-Demanded) and the quantity supplied (Q-Supplied) after the imposition of the rent control. Part 3: Use an area tool to illustrate the amount of consumer surplus if only those who value apartments at a price greater than or...
For the following set of demand and supply, equations do the following, Find the equilibrium price...
For the following set of demand and supply, equations do the following, Find the equilibrium price and equilibrium quantity for each set of equations. Draw each set of equations in a clearly labeled graph and show the equilibrium P and Q. Calculate the consumer surplus at the equilibrium P and Q found in b. If the price were to increase, calculate the loss in the consumer surplus. Calculate the total new consumer surplus. If the price were to decrease, calculate...