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Consider the market for housing in Wonderland. Demand schedule is P = 3,400,000 - 3Q and supply schedule is P = 200,000 + 2Qs.
Consider the market for housing in Wonderland. Demand schedule is P = 3,400,000 - 3Q and supply schedule is P = 200,000 + 2Qs. a. b. (3 marks) Find the equilibrium price (S) and equilibrium quantity of the market. (17 marks) To make housing market equilibrium price decrease by $240,000, the government of Wonderland is considering the following policies: Plan A: Control the qualification of being able to buy housing such that the demand drops by 200,000. Plan B: set price ceiling at $1.240,000 Plan C: set price floor at $1,240,000 Plan D: collect tax $600,000 from buyer. Plan E: collect tax $600,000 from seller. Which plan(s) can make the government achieve the policy target? Explain with market equilibrium quantity, market equilibrium price and proper figures.
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