If the government were to remove rent controls from the New York ...

[Coya19@aol.com]

If the government were to remove rent controls from the New York City rental market, then
 
  A) all would be harmony.
  B) the price paid by buyers would decrease and the quantity of rental units will decrease.
  C) the price received by sellers would increase and the quantity of rental units will increase.
  D) the price received by sellers would decrease and the quantity of rental units will decrease.

Question 2

Compare and contrast the effect of perfect competition to the effect of perfect price discrimination on:
 
  a. efficiency.
  b. consumer surplus.
  c. economic profit in the long run.

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Answer to Question 1

C

Answer to Question 2

a. Both perfect competition and perfect price discrimination create efficiency.
b. Consumers receive consumer surplus with perfect competition. However, there is no consumer surplus with perfect price discrimination.
c. Perfectly competitive firms cannot earn an economic profit in the long run. A perfectly price discriminating monopoly earns the maximum amount of economic profit.