1. In a crowded city far away, the supply function of two-room rental apart- ments was given byq= 5+2p, and the demand function was given byq= 2254p, wherepis the rental rate in dollars per week.
2. (a)Compute the equilibrium rentpand quantityq.
3. (b)The civic authorities decided that rents were too high. If the authorities made it illegal to rent an apartment for more than 30 dollars per week, what would be the new equilibrium rentpand quantityqof apartments rented?
4. (c)To avoid a housing shortage, the authorities agreed to pay landlords enough of a subsidy to make quantity supplied equal to quantity demanded. How much would the weekly subsidysper apartment have to be, in order to eliminate excess demand at the ceiling price of 30?