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Rent controls on apartments are an example of price controls on a commodity. They keep the price artificially low (below the equilibrium price). Sketch
Rent controls on apartments are an example of price controls on a commodity. They keep the price artificially low (below the equilibrium price). Sketch a graph of supply and demand curves, and label on it a price p below the equilibrium price. What effect doe forcing the price down to p have on: (a) The producer surplus? (b) The consumer surplus? (c) The total gains from trade (Consumer surplus+ Producer surplus)?
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