Answered: Suppose that the average monthly rent…

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance

Section: Chapter Questions

Problem 6QFR

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Question

Consider the following data from the market demand and supply for apartments.

a. Suppose that the average monthly rent for apartments is $1,200. At this price, how many apartments will be rented in this market?

_____apartments

b. Is the market currently in equilibrium, experiencing a shortage, or experiencing a surplus?

equilibrium

surplus

shortage

c. What do you expect to happen to the average rent?

fall

rise

will not change

d. What is the equilibrium rent and quantity in the market?

Equilibrium rent:
_____$

Equilibrium quantity: _____apartments

Rent
Quantity Demanded
Quantity Supplied
$2.000
5,000
23,000
$1.800
8,000
20,000
$1,600
11,000
17,000
$1,400
14,000
14,000
$1,200
17,000
11,000
$1,000
20,000
8,000

Definition Video Formula Definition Phenomenon in which market supply and demand balance each other. Market equilibrium is the economic state in which the market demand curve intersects the market supply curve, giving us the equilibrium price and equilibrium quantity for which a commodity can be sold and purchased in an economy. When market equilibrium is achieved, it suggests that all resources have been allocated efficiently and that there is just a distribution of income and resources in the economy. Video Formula

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