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Draw a hypothetical supply-demand graph for the apartment rental market in San Francisco. In your graph...

Draw a hypothetical supply-demand graph for the apartment rental market in San Francisco. In your graph what is the equilibrium price and quantity of apartments? Show the impact of a binding price ceiling that San Francisco puts on rental properties. At the price ceiling what is the quantity demanded? What is the quantity supplied?

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Answer #1

This is the hypothetical graph of apartment rental market here E is the point of equilibrium where demand and supply meets P is the equilibrium price and Q is the equilibrium quantity of apartment rental market. Price ceiling is at price P' shown in diagram this price ceiling cause excess demand or shortage as demand is more than supply at this point quantity demanded at price ceiling is Qd and quantity supplied is Qs.

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