Use the table to answer the question.

Question

Price ($) Quantity Demanded (thousands) Quantity Supplied
(thousands)
1,000 600 300
1,500 500 500
2,000 400 700
2,500 300 900
The table gives the supply and demand schedules in a market for apartments. A government price control is implemented that results in a shortage of 300,000 apartments. Which price control must have been used?

(1 point)
Responses

a price floor of $1,000
a price floor of 1,000 dollars

a price ceiling of $1,000
a price ceiling of 1,000 dollars

a price ceiling of $2,000
a price ceiling of 2,000 dollars

a price floor of $2,000
a price floor of 2,000 dollars
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Answer 1

To determine which price control resulted in a shortage of 300,000 apartments, we need to analyze the supply and demand at the given prices in the table.

1. At a price of $1,000:

   • Quantity Demanded: 600,000
   • Quantity Supplied: 300,000
   • Shortage = 600,000 - 300,000 = 300,000

2. At a price of $1,500:

   • Quantity Demanded: 500,000
   • Quantity Supplied: 500,000
   • No shortage or surplus.

3. At a price of $2,000:

   • Quantity Demanded: 400,000
   • Quantity Supplied: 700,000
   • Surplus = 700,000 - 400,000 = 300,000

4. At a price of $2,500:

   • Quantity Demanded: 300,000
   • Quantity Supplied: 900,000
   • Surplus = 900,000 - 300,000 = 600,000

A shortage occurs when the quantity demanded exceeds the quantity supplied. Since a shortage of 300,000 apartments occurs specifically at a price of $1,000, this indicates that the government price control must be a price ceiling set at $1,000.

Therefore, the correct response is:

a price ceiling of $1,000