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Using a supply and demand graph, illustrate the market for rent-controlled apartments with the following data: Equilibrium rent without rent control: $1,500 Rent with rent
Using a supply and demand graph, illustrate the market for rent-controlled apartments with the following data:
Equilibrium rent without rent control: $1,500
Rent with rent control: $700
Quantity of apartments demanded with rent control: 50,000
Quantity of apartments supplied with rent control: 20,000
What is the value of the initial shortage of apartments with rent control?
Now assume rent control leads to a reduction in the supply of apartments, and the new quantity supplied is now 15,000. Illustrate this on your graph.
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