Questions: Suppose that the demand and supply schedules for rental apartments in the city of Gotham are as given in the following table. Monthly Rent Apartments Demanded Apartments Supplied 2,500 10,000 15,000 2,000 12,500 12,500 1,500 15,000 10,000 1,000 17,500 7,500 500 20,000 5,000 Instructions: Enter your answers as a whole number. a. What is the market equilibrium rental price per month and the market equilibrium number of apartments demanded and supplied? Market equilibrium rental price = Market equilibrium quantity = apartments b. If the local government can enforce a rent-control law that sets the maximum monthly rent at 1,500, will there be a surplus or a shortage? (Click to select) : Of how many units? apartments per month How many units will actually be rented each month? apartments c. Suppose that a new government is elected that wants to keep out the poor. It declares that the minimum rent that landlords can charge is 2,500 per month. If the government can enforce that price floor, will there be a surplus or a shortage? (Click to select)

Let's analyze the given data and answer the questions step by step.

The market equilibrium occurs where the quantity demanded equals the quantity supplied.

From the table:

• At \$2,000, the quantity demanded is 12,500 apartments and the quantity supplied is also 12,500 apartments.

Therefore, the market equilibrium rental price is \$2,000, and the market equilibrium quantity is 12,500 apartments.

Market equilibrium rental price = \$2,000 Market equilibrium quantity = 12,500 apartments

If the rent is controlled at \$1,500:

• Quantity demanded at \$1,500 is 15,000 apartments.
• Quantity supplied at \$1,500 is 10,000 apartments.

Since the quantity demanded (15,000) is greater than the quantity supplied (10,000), there will be a shortage.

Shortage = Quantity demanded - Quantity supplied Shortage = 15,000 - 10,000 = 5,000 apartments

The number of units that will actually be rented each month will be the quantity supplied at the controlled price, which is 10,000 apartments.

Shortage = 5,000 apartments per month Units actually rented = 10,000 apartments

If the minimum rent is set at \$2,500:

• Quantity demanded at \$2,500 is 10,000 apartments.
• Quantity supplied at \$2,500 is 15,000 apartments.

Since the quantity supplied (15,000) is greater than the quantity demanded (10,000), there will be a surplus.

Surplus = Quantity supplied - Quantity demanded Surplus = 15,000 - 10,000 = 5,000 apartments

Surplus = 5,000 apartments per month

a. Market equilibrium rental price = \$2,000 Market equilibrium quantity = 12,500 apartments

b. Shortage = 5,000 apartments per month Units actually rented = 10,000 apartments

c. Surplus = 5,000 apartments per month