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Author Question: What's a direct long-run effect of imposing rent controls on apartments? A) A rise in demand for ... (Read 143 times)

lracut11

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on: Jun 29, 2018
What's a direct long-run effect of imposing rent controls on apartments?
 
  A) A rise in demand for rent controlled apartments
  B) A fall in demand for rent controlled apartments
  C) A fall in the supply of rent controlled apartments
  D) A rise in the supply of rent controlled apartments

Question 2

Electric utilities are often considered natural monopolies and are regulated.
 
  When would the price be highest: when the utility is not regulated, when it is regulated using an average cost pricing rule, or when it is regulated using a marginal cost pricing rule? When would its price be lowest?


joneynes

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Reply #1 on: Jun 29, 2018
Answer to Question 1

C

Answer to Question 2

The price would be highest if the utility was left unregulated and could set the profit-maximizing price. The price is lowest if the utility is regulated using a marginal cost pricing rule.


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