Equilibrium rental price and quantity in Vancouver Housing Market
Figure 1: Equilibrium price and quantity
Source: Created by the Author
The equilibrium rental price is $1300
The equilibrium quantity of housing is 10,000
Figure 2: Imposition of price ceiling
Source: Created by the Author
The new quantity of housing demand is 15000.
The quantity of housing that landlords would be willing to supply 5000.
The excess quantity of housing demand is (15000-5000) =10000 units
No, the landowner will not invest any more due to lack of proper incentive and insufficient generation of rent-related revenue.
If the rent control is impost then in long run the supply of good and decent housing in Vancouver will decrease. Hence, both the quality and quantity of housing will decline.
The city of Vancouver imposed rent control to give protection to the tenants against rent-price discrimination as well as to shield them from their landlord’s unfair eviction.
Rent controls are meant to help low-income residents.
As the rent is established below the equilibrium rent-price level the demanded quantity exceeds the quantity supplied thereby leading to a shortage of dwelling spacing and hence worsening-off the consumers.
I strongly disagree with the use of government imposed rent controls because it reduces the quality and quantity of available housing and thereby intensifying homelessness.
a.
Demand for ipods inelastic to price as compared to flat TV screen. This is because ipods can be carried anywhere and are preferred by the most of the people. A rise in price will not lower demand for ipods and the demand curve is vertically sloped.
Demand curve of Ipod
Electricity is a necessity consumption and so in both the cases demand will not fall, making it highly inelastic to price making the demand curve as a vertical straight line.
Highly inelastic demand curve
Acetaminophen will have elastic demand in comparison with Tylenol brand acetaminophen because medicines are necessities and due to brand value, the demand for acetaminophen will not fall much.
Ipads when they first were produced were unknown to the people and so it had an elastic demand, however, Ipads two years from now have gathered a market demand making it inelastic to price change.
a.
The advocates of the new proposal wanted an equitable distribution of prices so that people who travel long distance can give the same amount of fair as compared to short distance travelers. Moreover, profit maximization is the sole requirement of proposers who wanted to raise earnings from public transportation.
The elasticity of demand is considered to be elastic will relation to because public transportation has many substitutes that can be used in place of buses such as private cars, cab services, bike services and other options of transportations (1).
If the total revenue goes up then it means that public buses have an inelastic demand otherwise revenue must fall. If more people use public buses then demand for car parking space in the down town will go down.
References
- Bohi DR. Analyzing demand behavior: a study of energy elasticities. RFF Press; 2013 Nov 26.
- Pindyck RS, Rubinfeld DL. Microeconomics. Boston: Pearson,; 2015.
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