Demand for apartments in a certain town is D(x) = 2000-x, and the supply is S(x) = 500 + 11x, where x is the number of apartments, in hundreds, and D(x) and S(x) are the rent in dollars per month, per apartment. a) Find the equilibrium point. b) Find the consumer surplus and producer surplus. c) Suppose a maximum rent of $1325 per month is imposed by the town council. Find the point (Xc. Pc). d) Find the new consumer surplus and new producer surplus. e) Find the deadweight loss.
Demand for apartments in a certain town is D(x) = 2000-x, and the supply is S(x) = 500 + 11x, where x is the number of apartments, in hundreds, and D(x) and S(x) are the rent in dollars per month, per apartment. a) Find the equilibrium point. b) Find the consumer surplus and producer surplus. c) Suppose a maximum rent of $1325 per month is imposed by the town council. Find the point (Xc. Pc). d) Find the new consumer surplus and new producer surplus. e) Find the deadweight loss.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter6: Simple Pricing
Section: Chapter Questions
Problem 8MC
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Please help with parts c-e. My c is wrong.
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