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question 109

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Use the following to answer questions:
Figure: Rent Controls Use the following to answer questions: Figure: Rent Controls   -(Figure: Rent Controls)  Look at the figure Rent Controls. If rent controls are set at Rent<sub>3</sub>: A)  the shortage of rental units is the distance Q<sub>3</sub> - Q<sub>1</sub>. B)  some renters will be willing to pay a price as high as Rent<sub>4</sub> for Q<sub>3</sub> units. C)  no one will have to pay a higher actual price than Rent<sub>0</sub>, nor will anyone be willing to do so. D)  rent will remain at Rent<sub>2</sub>.
-(Figure: Rent Controls) Look at the figure Rent Controls. If rent controls are set at Rent3:


Definitions:

Demand Curve

A graphic representation showing how the quantity demanded of a good or service varies with its price.

Marginal Cost

The hike in complete costing that comes with the fabrication of an additional unit of a good or service.

Competitive Buyer

A buyer in a market who cannot influence the market price and takes the price as given.

Marginal Expenditure

The rise in expense from obtaining one more unit of a good or service.

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