how do they create housing shortage, a bit weak on this micro/early econ stuff from Book 2 is it b/c demand gets real high b/c of the artificial ceiling? what am i missing? thanks
the ceiling sets the price lower than at equilibrium --> supply< demand just draw a graph
yes, most easily explained with a diagram http://livingeconomics.org/images/glossary/price_support_control.gif with a rent ceiling, the quantity demanded exceeds the quantity supplied edit: better diagram
gogiants Wrote: ------------------------------------------------------- > the ceiling sets the price lower than at > equilibrium --> supply< demand > just draw a graph okay, cool, just needed someone to confirm. i am reading like an animal here and put post its on pages i want to double check with you guys… thanks
daj224 Wrote: ------------------------------------------------------- > how do they create housing shortage, a bit weak on > this micro/early econ stuff from Book 2 > > is it b/c demand gets real high b/c of the > artificial ceiling? what am i missing? > > > thanks If the ceiling for rent is 100$ and you’re only willing to supply the apartment at 120$, you will not supply the apartment. This will trigger black market etc i.e. rentee paying 100 declared and 20 under the table.
meazza Wrote: > > If the ceiling for rent is 100$ and you’re only > willing to supply the apartment at 120$, you will > not supply the apartment. This will trigger black > market etc i.e. rentee paying 100 declared and \> 20 under the table. thanks, sounds like black market is a way to “fix” the inefficiency the ceiling creates, or is the blak mkt itself an inefficiency?
daj224 Wrote: ------------------------------------------------------- > meazza Wrote: > > > > > If the ceiling for rent is 100$ and you’re only > > willing to supply the apartment at 120$, you > will > > not supply the apartment. This will trigger > black > > market etc i.e. rentee paying 100 declared and \> \> 20 under the table. > > > thanks, sounds like black market is a way to “fix” > the inefficiency the ceiling creates, or is the > blak mkt itself an inefficiency? Black market creates equilibrium. Example, tickets to an event are on sale at 100 on ticketmaster. You're willing to pay 200 but you weren’t able to buy on ticketmaster. The person who was only willing to pay $100 will sell them to you and make $100 profit. Scalping is illegal, blackmarket creates equilibrium.
nds like black market is a way to > “fix” > > the inefficiency the ceiling creates, or is the > > blak mkt itself an inefficiency? > > Black market creates equilibrium. Example, > tickets to an event are on sale at 100 on \> ticketmaster. You're willing to pay 200 but you > weren’t able to buy on ticketmaster. The person > who was only willing to pay $100 will sell them to > you and make $100 profit. > > Scalping is illegal, blackmarket creates > equilibrium. thanks! going to read for 2 hrs, wll see everyone later or if not, tomorrow