The figure shows the market for new homes at the end of 2022. Virtually everyone requires a mortgage?a loan?to buy a home. In 2023, the interest rate paid on mortgages rose significantly. Consequently, at every price the quantity of new homes demand changed by 3 million. The market was in equilibrium in 2022 and 2023. You will be asked several questions about this situation.

At the end of 2022, what was the allocatively efficient quantity of new homes?

Illustrate how the market (that is, the demand and supply) for new homes changed in 2023.

In 2023, what is the equilibrium price and quantity of new homes? What is the allocatively efficient quantity? What is the amount of consumer surplus? Is there a deadweight loss?