Questions: The table contains the demand and supply schedule for apartments in a city. Suppose the city council feels that the equilibrium rent is too high and imposes a price ceiling of 750/month. Rent/month Quantity demanded Quantity supplied 1,750 300 4,800 1,500 600 2,400 1,250 1,200 1,200 1,000 2,400 600 750 4,800 300 The price ceiling results in a surplus. shortage.

The table contains the demand and supply schedule for apartments in a city. Suppose the city council feels that the equilibrium rent is too high and imposes a price ceiling of 750/month. Rent/month Quantity demanded Quantity supplied 1,750 300 4,800 1,500 600 2,400 1,250 1,200 1,200 1,000 2,400 600 750 4,800 300 The price ceiling results in a surplus. shortage.
Transcript text: The table contains the demand and supply schedule for apartments in a city. Suppose the city council feels that the equilibrium rent is too high and imposes a price ceiling of $\$ 750 /$ month. \begin{tabular}{|c|c|c|} \hline Rent/month & Quantity demanded & Quantity supplied \\ \hline$\$ 1,750$ & 300 & 4,800 \\ \hline$\$ 1,500$ & 600 & 2,400 \\ \hline$\$ 1,250$ & 1,200 & 1,200 \\ \hline$\$ 1,000$ & 2,400 & 600 \\ $\$ 750$ & 4,800 & 300 \\ \hline \end{tabular} The price ceiling results in a $\square$ surplus. shortage.
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Solution

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The answer is: shortage.

Explanation: A price ceiling is a government-imposed limit on how high a price can be charged for a product. When a price ceiling is set below the equilibrium price, it typically results in a shortage because the quantity demanded exceeds the quantity supplied at that price.

Let's analyze the given data:

  • At the price ceiling of \$750/month:
    • Quantity demanded = 4,800 apartments
    • Quantity supplied = 300 apartments

Since the quantity demanded (4,800 apartments) is much higher than the quantity supplied (300 apartments) at the price ceiling of \$750/month, there is a shortage of apartments.

Summary: The imposition of a price ceiling of \$750/month results in a shortage of apartments in the city.

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