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Consider a perfectly competitive market for rental housing. The monthly (inverse) demand and supply functions for...

Consider a perfectly competitive market for rental housing. The monthly (inverse) demand and supply functions for rental units are given by P = 70 – 0.7QD & P = 10 + 0.3QS, where P is monthly rent, and Q is the number of rental units. Note: Each numerical value MUST be rounded to ones. ex) 34.3 --> 34 or 1.5 --> 2

Part a) Using the given inverse functions above, compute the equilibrium price and quantity.

Q* =

P* =

Part b) Now suppose the government sets a maximum rent at $19. Compute the following under this price control.

Market quantity =

MB =

CS =

DWL =

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