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9966 [12]
3 years ago
9

e competitive equilibrium rent in the city of Lowell is currently​ $1,000 per month. The government decides to enact rent contro

l and to establish a price ceiling for apartments of​ $750 per month. Briefly explain whether rent control is likely to make each of the following people better or worse off.
Business
1 answer:
nikklg [1K]3 years ago
6 0

Answer:

The people that are already renting an apartment are going to benefit from the price ceiling ($750) since it is lower than the equilibrium price of $1,000. They will be OK as long as they keep renting their apartments.

But since price ceilings lower the quantity supplied of apartments, if someone is currently looking for an apartment or is considering moving to another apartment, then they will be worse off.

Less owners will be willing to rent their apartments at the price set ($750) because they are losing money. So there will be less available apartments which obviously will make it more difficult to find a new apartment to rent hurting both tenants and owners.

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Answer:

Increase by $37,100.

It will accept any time the price is above $43 with the condition it will not incur in additional fixed cost.

$63. is the sales price that generates 106,000 dollar of operating income

Explanation:

As the units will not inccur in any additional fixed cost we should check for the contribution margin this units will provide:

50 dollars - 43 dollar of variable cost = 7 dollars

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The sales reveues will increase by that amount.

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Keynesian economists generally argue that aggregate demand is volatile and unstable, and as a result, market economies often experience inefficient macroeconomic consequences. They further argue that these economic fluctuations can be mitigated through coordinated economic policies between governments and central banks. Fiscal and monetary policy measures, in particular, help stabilize economic output, inflation, and unemployment throughout the business cycle. Keynesian economists generally advocate a regulated market economy. Although primarily the private sector, it plays an active role in government intervention during recessions.

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