Assignment #2:

1. Suppose that the demand and supply schedules for rental apartments in the city of Gotham are as given in the table.

Monthly Rent	Apartments Demanded	Apartments Supplied
2500	10,000	15000
2000	12,500	12500
1500	15,000	10000
1000	17500	7500
500	20000	5000

a. What is the market equilibrium rental price per month and the market equilibrium number of apartments demanded and supplied?

b. If the local government can enforce a rent-control law that sets the maximum monthly rent at 1500.will there be a surplus or shortage?

c. Suppose that a new government is elected that wants to keep out the poor. It declares that the minimum rent that can be charged is 2500 per month. If the government can enforce that price floor, will there be a surplus or a shortage?