Consider the market for single bedroom rental apartments in Hobart in 2019 with an upward sloping supply curve and downward sloping demand curve. The current equilibrium price of single bedroom rental apartments is $350 per week with 15,000.

1. Draw a diagram showing the market for single bedroom rental apartments in Inner Hobart. Include an appropriate title and label the demand curve, supply curve, equilibrium price and quantity.

2.Consider if the government introduces a legally enforced price ceiling of $200/week that the price (rent) of single bedroom rental apartments in Inner Hobart can not be above.

i. On your diagram label the number of for single bedroom rental apartments supplied and demanded and the price with the price ceiling. Label the consumer and producer surplus and dead-weight loss with the price ceiling.

ii. Explain who is better and worse off a result of the price ceiling and why.