The graph shows the demand for on-campus student housing at Purdue University in Lafayette, Indiana. The college has 3,000 rooms for rent. What is the equilibrium rent and the equilibrium quantity of rooms rented? If the college sets a rent ceiling on on-campus housing of $75 a week, what is the quantity of rooms rented? Is this outcome efficient? Is it fair? The equilibrium rent is $100 a week and 3000 rooms are rented. If the college sets a rent ceiling on on-campus housing of $75 a week, the quantity of rooms rented is 3000 With the rent ceiling, this market is inefficient The allocation of housing with the rent ceiling is O A. fair because without the rent ceiling, the university would charge too high a rent O B. fair because it makes housing affordable for the poorest students C. unfair because it prevents voluntary exchange and does not necessarily reallocate housing to the poorest students OD. unfair because it makes it difficult for off-campus landlords to compete with on-campus housing 175 150- 125- 100- 75- 50- 25+ Rent (dollars per week) 1500 2000 S 2500 3000 Quantity (rooms) 3500 D 4000

The graph shows the demand for on-campus student housing at Purdue University in Lafayette, Indiana. The college has 3,000 rooms for rent. What is the equilibrium rent and the equilibrium quantity of rooms rented? If the college sets a rent ceiling on on-campus housing of $75 a week, what is the quantity of rooms rented? Is this outcome efficient? Is it fair? The equilibrium rent is $100 a week and 3000 rooms are rented. If the college sets a rent ceiling on on-campus housing of $75 a week, the quantity of rooms rented is 3000 With the rent ceiling, this market is inefficient The allocation of housing with the rent ceiling is O A. fair because without the rent ceiling, the university would charge too high a rent O B. fair because it makes housing affordable for the poorest students C. unfair because it prevents voluntary exchange and does not necessarily reallocate housing to the poorest students OD. unfair because it makes it difficult for off-campus landlords to compete with on-campus housing 175 150- 125- 100- 75- 50- 25+ Rent (dollars per week) 1500 2000 S 2500 3000 Quantity (rooms) 3500 D 4000

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter18: Pricing The Factors Of Production

Section: Chapter Questions

Problem 4TY

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