Q14 of 15 Page 5

Suppose the market determined rent for apartments is too high for common people to afford. If the government comes forward to help those, seeking apartments on rent by imposing control on rent, what impact will it have on the market for apartments?



If the government imposes price ceiling by Rent Control Act can be charged as the rent of apartment resulting, decline in equilibrium price due to:


(i) Excess demand of apartments.
(ii) Black marketing by builders.


More from this chapter

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11

Explain the sequence of change that will take place when there is excess demand of the commodity.

 12

What is excess demand for a good in a market? Explain its effects on the market for that good using diagram.

 13

Market for a good is in an equilibrium. Suppose supply decrease. Giving reasons explain its effects on equilibrium price and quantity. Use diagram.

 15

Suppose the demand and supply curve of commodity X in a perfectly competitive market are given by:

qD = 700 – p


qS = 500 + 3p for p ≥ 15


= 0 or 0 ≤ p < 15


Assume that the market consists of identical firms. Identify the reason behind the market supply of commodity X being zero at any price less than Rs 15. What will be the equilibrium price for this commodity? At equilibrium, what quantity of X will be produced?