Question

assume that all landlords abide by the law. compare the economic surplus in this market when there is no price - ceiling to when there is a price ceiling.
1.) use the triangle drawing tool to shade in the change in economic surplus as a result of the price ceiling. properly label this shaded area indicating whether surplus has increased (new economic surplus) or decreased (deadweight loss).
2.) use the rectangle drawing tool to shade in transferred surplus as a result of the price ceiling. properly label this shaded area indicating whether this surplus is transferred from producers to consumers (transfer to consumer) or from consumers to producers (transfer to producer).
carefully follow the instructions above, and only draw the required objects.
assume that the quantity of apartments supplied is the same as you determined above. but now assume that landlords ignore the law and rent this quantity of apartments for the highest rent they can get. briefly explain what this rent will be.
if landlords supply only 150 thousand apartments and ignore the price ceiling, then they can charge rent of $ . (enter your response as an integer.)

Explanation:

Step1: Understand economic surplus concept

Economic surplus is the sum of consumer and producer surplus. Without price - ceiling, market is at equilibrium with maximum economic surplus.

Step2: Analyze effect of price - ceiling

A price - ceiling below equilibrium price reduces economic surplus. The decrease in economic surplus is the deadweight loss, which is the area of the triangle formed by the difference in quantity supplied and demanded at the price - ceiling and the equilibrium price and quantity.

Step3: Determine transferred surplus

The transferred surplus is the area of the rectangle. In case of a price - ceiling, producer surplus is transferred to consumers as consumers can buy at a lower price.

Step4: Consider landlords ignoring price - ceiling

If landlords supply a certain quantity and ignore the price - ceiling, they will charge the price corresponding to the demand curve for that quantity.

Answer:

1. Shade a triangle to represent deadweight loss (decrease in economic surplus). Label it "deadweight loss".
2. Shade a rectangle to represent surplus transferred from producers to consumers. Label it "transfer to consumer".

If landlords supply 150 thousand apartments and ignore the price - ceiling, they can charge the rent corresponding to the price on the demand curve for a quantity of 150 thousand apartments. Without the demand - curve data, we cannot give a numerical answer for the rent value.