Use the table to answer the 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 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 $1,000 a price floor of 1,000 dollars a price floor of $2,000

Answer 1

To determine which price control resulted in a shortage of 300,000 apartments, we need to analyze the provided data in the context of price ceilings and price floors.

A price ceiling is a maximum price set by the government that is below the equilibrium price, leading to a shortage because it keeps prices low and increases quantity demanded while decreasing quantity supplied.

A price floor is a minimum price set by the government above the equilibrium price, leading to a surplus because it keeps prices high, resulting in decreased quantity demanded and increased quantity supplied.

Looking at the data:

• At a price of $1,000, the quantity demanded is 600,000 and the quantity supplied is 300,000. This leads to a shortage of 300,000 (600,000 - 300,000 = 300,000).
• At a price of $1,500, the quantity demanded is 500,000 and the quantity supplied is 500,000. There is no shortage or surplus.
• At a price of $2,000, the quantity demanded is 400,000 and the quantity supplied is 700,000, which leads to a surplus.
• At a price of $2,500, the quantity demanded is 300,000 and the quantity supplied is 900,000, which also indicates a surplus.

Since a shortage of 300,000 apartments occurs at the price of $1,000, which is below the equilibrium price (established at $1,500), this indicates that a price ceiling of $1,000 was implemented.

Thus, the correct response is: a price ceiling of $1,000.