Using a Supply and Demand Graph,illustrate the Market for Rent-Controlled

question 37

Essay

Using a supply and demand graph,illustrate the market for rent-controlled apartments with the following data:
Equilibrium rent without rent control: $1,500
Rent with rent control: $700
Quantity of apartments demanded with rent control: 50,000
Quantity of apartments supplied with rent control: 20,000
What is the value of the initial shortage of apartments with rent control?
Now assume rent control leads to a reduction in the supply of apartments,and the new quantity supplied is now 15,000.Illustrate this on your graph.
What is the value of the shortage of apartments following the decrease in supply?

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Definitions:

Distal Convoluted Tubule

A portion of the kidney nephron that functions in the reabsorption of water, sodium, and chloride and in the secretion of potassium and hydrogen ions.

Collecting Duct

The collecting duct is a tubular segment of the nephron in the kidney that processes urine through the reabsorption of water and solutes, playing a critical role in the regulation of body water and electrolyte balance.

Ketones

Organic compounds characterized by a carbonyl group attached to two carbon atoms, produced by the liver during the breakdown of fats for energy.

Diabetes Mellitus

A chronic condition characterized by high blood sugar levels due to the body's inability to produce enough insulin or effectively use it.