Question 3 - 40 marks (1-5 sentences + calculations per section) Consider the market for single bedroom rental apartment

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Question 3 40 Marks 1 5 Sentences Calculations Per Section Consider The Market For Single Bedroom Rental Apartment 1 (153.95 KiB) Viewed 38 times

Question 3 - 40 marks (1-5 sentences + calculations per section) Consider the market for single bedroom rental apartments in Hobart in 2022 as shown in the diagram below. Market for Single Bedroom Appartments in Hobart 2022 Rent ($/week) $650 $600 $550 $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 -Supply Demand 0 5 10 15 20 25 30 35 Thousands of Single Bedroom Apartments Rented per week a. What is the market equilibrium price and quantity of single bedroom apartments in Hobart? Explain why it is an equilibrium. (5 marks) b. Calculate the consumer, producer and total economic surplus for the market for single bedroom rental apartments in Hobart in 2022. (10 marks) C. Consider if the Tasmanian government were to introduce a legally enforced price ceiling of $300/week that the price (rent) of single bedroom apartments in Hobart can not be above. i. Draw a diagram that that shows the effect of the price-ceiling on the single bedroom rental apartments in Hobart. Explain what would happen to the number single bedroom apartments supplied and demanded? (10 marks) ii. Calculate the consumer surplus and producer surplus and compare it to the initial situation to determine who is better and worse off with a price ceiling of $300/week. Is there any deadweight loss from a price ceiling of $300/week? If so calculate the size of the deadweight loss (15 marks)