answer question 3 l Verizon10:55 PMncuone.ncu.eduInstructionsAssume that the City Council in Prescott,Arizona is considering implementing priceceilings on rental units based on the number ofbedrooms in the unit. The demand function forrental units (on a single bedroom equivalentbasis) is given by Qp = 120 – 4P and thesupply function is given by Qs = 2P, where P isprice and Q is quantity. The Council isconsidering imposing a ceiling price on rentalunits of Pmax = 16.1. Using the given functions, draw acorresponding demand curve and a supplycurve. Properly label the equilibrium price andquantity. Then show what will happen toequilibrium if the City Council imposes a priceceiling at 16.NOTE: There are numerous guides online thatdemonstrate how to draw supply and demandcurves; most are done in Excel. To create thedemand curves that you need for thisassignment, create an Excel file with a pricecolumn, including prices from $1 to $30. Usingthe formulas, compute the quantity demandedat each price and quantity supplied for eachprice. Then copy and paste the graph into yourWord document where you will write out l Verizon10:56 PMncuone.ncu.eduanswers to the following questions.2.Are consumers of rental-housing in Prescottwell-served by this price ceiling policy? Providea careful economic analysis in support of yourclaim. In particular, discuss whathappens if a regulated price is set that isnot equal to the equilibrium price.3. Suppose that the Council is concerned thatlandlords will allow the quality of their rentalunits to deteriorate following the imposition ofthe ceiling price. What can you infer about thelevel of quality that landlords' provision willallow if consumers are worse off, following theimposition of the ceiling price? Provide acareful economic analysis in support of yourclaim.Suppose now that the proposal before theCity Council contemplates imposing a price4.ceiling on apartment rentals, but not on houserentals. Would owners of rental houses inPrescott be likely to support this proposal, orwould they prefer the status quo (i.e., no priceceilings)? Provide the economic rationale foryour answer. (In answering this question, youshould ignore all supply-side considerations. Inother words, just assume that supply adjustsfully to accommodate demand.)

Consumers are worse off when the worth which they need to pay isn't justified with the standard…

3. Suppose that the Council is concerned that landlords will allow the quality of their rental units to deteriorate following the imposition of the ceiling price. What can you infer about the level of quality that landlords' provision will allow if consumers are worse off, following the imposition of the ceiling price? Provide a

3. Suppose that the Council is concerned that landlords will allow the quality of their rental units to deteriorate following the imposition of the ceiling price. What can you infer about the level of quality that landlords' provision will allow if consumers are worse off, following the imposition of the ceiling price? Provide a

MARKETING 2018

19th Edition

ISBN:9780357033753

Author:Pride

Publisher:Pride

Chapter14: Marketing Channels And Supply Chain Management

Section14.1: Taza Cultivates Channel Relationships With Chocolate

Problem 1VC

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