I need help with H I J K and L 2.a. In green pen, graphically show the market fo

Question

I need help with H I J K and L

2.a. In green pen, graphically show the market for apartments. Label supply and demand and the equilibrium price and quantity. Demand shows the price consumers are __________ ___ ______ for a given quantity and Supply shows the price producers are __________ ____ ________ for a given quantity.

b. In black pen, draw diagonal lines to shade in the consumer surplus. Discuss what it means.

c. In red pen, draw diagonal lines to shade in the producer surplus. Discuss what it means.

d. In blue pen, show a price ceiling on apartments. (For parts d. – i., consider only legal behavior.) Label the resulting Qd and Qs and show the amount of shortage or surplus that exists at the price ceiling. Explain why the disequilibrium occurs.

e. In black pen, draw diagonal lines in the opposite direction of those in b. to show the new consumer surplus.

f. In red pen, draw diagonal lines in the opposite direction of those in c. to show the new producer surplus.

g. In blue pen, darkly outline the inefficiency that results from the price ceiling on apartments.

h. Who gains and who loses from the price ceiling?

i. Overall, is society better or worse off (from a total gain perspective) with the price ceiling? Given this answer, what are some reasons why the price floor may be implemented. Think about the number of winners and losers from the program, how much each one gains or loses, and their incentive to lobby for it.

j. How might the rent control give rise to a black market? Explain how it would work and who would benefit or lose from it.

k. How might the rent control lead to a decrease in Supply of apartments (not just Qs) in the long run?

l. Given what you know about rent controls now, would you vote for or against them in your town? Why?

Explanation / Answer

Since help is asked from h to l I am answering that.

h) From price ceiling the consumers or the poorer section of the society gains because the government fixes the maximum price of thecommodity.Sellers cannot charge any price higher than the ceiling price and so producers lose.

i)Some consumers are worse off because they can no longer buy the good due to decrease in consumer surplus and some are better off because they can buy at a lower price.Producers sell less at lower price and some producers leave the market.Producers surplus decreases.The economy is worse off because there is no producers or consumers surplus.

The government implements price floor to prevent prices form being too low.In that way the goverment tries to safeguard the interest of the suppliers.At times bumper crop in agricultural sector leads to fall in the price of crop and the poor farmers suffer.In such a situation the government adopts price floor.

The most common price floor is minimum wage of labourers and so labourers gain . At the same time farmers are also protected. However price floors harms society more than helping society.Deadweight welfare loss occurs which is the loss of producer and as well as the loss of consumer surplus.

j) Rent control is a form of price ceiling and price ceilings lead to black marketing Present renters hoard their apartments and new apartments are never available.Tenants sometimes offer a part of their house to others and make money.  There may be winners and losers from rent control. The losers are the working class renters.The beneficiaries were older people who stayed in the locality for long.

k) Investors in new construction ,do not want to invest in less profit making areas and so restrain themselves from making investment where profits are less.So rent control results in decresein supply.

l)Rent control limits the possibility to increase rent during the duration of tenants stay there.This policy can protect a person from being turned out of their houses.Building houses to meet the incresing need takes time and so I WOULD vote for rent control.

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