Landlords show up at the next council meeting and demand an increase in rents. The council members (concerned about their upcoming re-election campaigns) vote to repeal the price ceiling and instead replace it with a price floor that is RM50 above the equilibrium price. what is the new market price? how many two bedroom apartments will be rented?
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Expert's answer
2020-11-18T14:58:09-0500
The new market price will settle at 25 units above the previous equilibrium price. The number of leased apartments will decrease by at least 20%.
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