AHSEC Class 11 Economics Chapter 5 Solution 2025| Class 11 Economics Question Answer | Lesson 5 HS 1st Year Economics Question Answer | English Medium|

 Chapter 5

MARKET EQUILIBRIUM

Exercises 

1. Explain market equilibrium.

Answer:  Market equilibrium is a state in which demand and supply are equal in a market. This means that the quantity that buyers want to buy at a given price is the same as the quantity that sellers are willing to sell. In this situation, there is no excess demand (shortage) or excess supply (surplus) in the market.

Key properties of market equilibrium:

1. Market Price: The price produced in equilibrium is called the equilibrium price.
2. Market Quantity: The quantity bought and sold in equilibrium is called the equilibrium quantity.
3. Demand and supply matching:
   • If prices are high, supply is high and demand falls, creating excess supply (surplus).
   • If the price is low, demand is high and supply is reduced, creating a shortage.

Graphic Illustration:
Market equilibrium is usually represented by demand and supply curves.

• Demand Curve: Shows the inverse relationship between price and demand.
• Supply Curve: Shows the direct relationship between price and supply.
• The point where these two curves meet is called the equilibrium point.

Example:
If the demand for a pair of pants in a market is 50 pairs per month and the supply is exactly 50 pairs, then that price and quantity are in equilibrium. If prices rise, demand falls and supply increases; If price falls, demand increases and supply decreases.

Maintaining market equilibrium is also influenced by government policies, tariffs, and transportation costs.

2. When do we say there is excess demand for a product in the market?

Answer:  Excess demand for a commodity in the market occurs when the demand for a commodity exceeds the supply at a given price . In this situation, buyers want to buy a larger quantity of the goods than they are entitled to, but sellers are unable to supply that quantity.

Additional Demand Characteristics:

1. Price Reduction:

   • If the price of a product is low instead of high, then more buyers want to buy the product.
   • As a result, demand increases and supply shortages.

2. Shortage:

   • The demand exceeds the supply, causing a shortage of goods in the market.

3. Pressure on prices:

   • During periods of excessive demand, the price of goods tends to increase, since the majority of buyers are interested in buying limited goods.

example:

Suppose the demand for rice in a market is 100 quintals, but the supply is 70 quintals. This means there is an additional demand for 30 quintals of rice. Under these conditions, rice is likely to be in short supply, and its price is likely to rise.

Reasons:

• Low price: When the price of a product is low, demand increases.
• Increase in people's income: If people's income increases, they try to buy more goods.
• Shortage of existing goods: When there is a shortage of a substitute good, the demand for the basic good increases.
• Unexpected events: Disruption of supply of goods due to epidemics, natural disasters etc.

solution:

The government can take various measures to address this problem, e.g.

• Increasing the supply of goods.
• Introduction of price control policy to control demand.
• increasing dependence on imports.

3. When do we say there is an oversupply of a product in the market? 

Answer:  Excess supply of a commodity in the market occurs when the supply of a commodity exceeds the demand at a given price . In this situation, sellers are eager to sell more of the goods, but buyers cannot buy that quantity.

Additional supply features:

1. Unsold items:
   • Oversupply results in a large number of items remaining unsold.
2. Depreciation pressure:
   • Sellers are forced to reduce prices to sell more products.
3. Producer losses:
   • Falling prices lead to lower incomes for producers, which can lead to a crisis.

example:

Suppose the demand for potatoes in a market is 100 quintals, but the supply is 150 quintals. This means there is an excess supply of 50 quintals of potatoes. In this case, the price of potatoes may start to decline.

Reasons for oversupply:

1. Price increase:
   • If the price of a product is higher, sellers provide more supply, but demand falls.
2. Decrease in demand:
   • Demand decreases as buyers' incomes decrease or their needs decrease.
3. Increased production:
   • If the production process is more active, supply increases.
4. Presence of alternative products:
   • If substitute products are available, demand for the original product falls.

solution:

Steps taken to solve the problem of oversupply—

1. Price Reduction:
   • Sellers can increase demand by lowering the price of the product.
2. Increase in exports:
   • exporting goods to reduce internal supplies.
3. Increasing demand:
   • Increase demand through promotion and marketing of products.
4. Government intervention:
   • The government can control the situation by buying additional supplies.

Thus, measures are taken to resolve the imbalance between supply and demand in times of oversupply.

4. What if the prevailing price in the market—

(i) is greater than the equilibrium price?

Answer:  When the price of a commodity is higher than the equilibrium price , there is an excess supply in the market. In this situation, sellers are eager to sell more goods, but buyers are not eager to buy goods at such high prices.

Results:

1. Additional supplies:

   • The supply of goods exceeds the demand, leaving a large number of goods unsold.

2. Depreciation pressure:

   • Sellers are forced to sell at lower prices to reduce unsold goods.

3. Market Inequality:

   • There is an imbalance between demand and supply.
   • Sellers suffer, especially if they have increased production or supply by making prices higher.

Graphic images:

• When price is higher than the equilibrium price, the supply curve is above the demand curve.
• This difference is called oversupply .

example:

Suppose the equilibrium price of a mobile phone is ₹10,000, where demand and supply are both 5,000 units. If the price of the phone is raised to ₹12,000, then 7,000 units are supplied, but demand falls to only 3,000 units. This additional 4,000 units remain unsold, which is an example of oversupply .

To handle this situation:

1. Price Reduction:

   • Sellers may try to drive up demand again by lowering prices.

2. Increase in exports:

   • Export unsold goods, to reduce internal supplies.

3. Demand Increase Initiatives:

   • Drive demand through promotions, discounts, or other efforts.

Thus, at a price higher than the equilibrium price, the demand for the good decreases and problems arise.

(ii) is lower than the equilibrium price?

Answer:  When the price of a commodity is below the equilibrium price , excess demand is created in the market. In this situation, buyers are more willing to buy goods at such low prices, but sellers are not able to provide sufficient supply at such prices.

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Results:

1. Growth in demand:
   • As a result of lower prices, more buyers try to buy the goods.
2. Lack of supply:
   • Sellers reduce production or supply at cheap prices, creating shortages.
3. Price upward pressure:
   • High demand and low supply puts pressure on commodity prices to rise.
4. Market Inequality:
   • There is a qualitative imbalance between demand and supply.

---

Graphic images:

• When price is lower than the equilibrium price, the demand curve is above the supply curve.
• This difference is called Excess Demand .

---

example:

Suppose the equilibrium price of rice in a market is ₹300 per quintal, where both demand and supply are 100 quintals. If the price falls to ₹200, demand increases to 150 quintals, but supply decreases to only 70 quintals. This shortage of 80 quintals is an example of excess demand .

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To handle this situation:

1. Raising prices:

   • Sellers can try to get closer to the equilibrium price by increasing the price of goods.

2. Increasing supply:

   • Governments or vendors can take measures to increase production and supply.

3. Efforts to reduce demand:

   • Present alternative products or alternative services to reduce demand for a product.

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Government Role:

The government can take various measures to solve this problem, e.g.

• controlled by price.
• Introduction of rationing system.
• Increase in supply by imports.

Thus, the demand for the good increases at a price below the equilibrium price and there is a shortage of supply.

5. Describe how prices are set in a fully competitive market where the number of firms is constant. 

Answer:  In a fully competitive market, prices are determined by market demand and supply when the number of firms is constant . In this type of market, each firm is a price taker , which means that no firm can monopolize prices.

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Major characteristics of a fully competitive market:

1. Uncounted Institutions: There are numerous institutions participating in the competition.
2. Homogeneous products: All firms produce similar products.
3. Free entry and exit: Firms have the freedom to enter and exit the market.
4. Complete Information: Buyers and sellers are dominated by saturated information about market prices and product quality.
5. Price Takers: Firms sell goods according to prices fixed in the market.

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The pricing process:

1. Pricing based on market demand and supply:

   • Demand Curve: Shows the demand of the entire market at different prices of goods.
   • Supply Curve: Shows the entire market supply at different prices of goods.
   • Prices are fixed at the point where the demand and supply curves meet.
   • This price is called the equilibrium price .

2. Role of firms in the market:

   • Each firm sells its product at the equilibrium price.
   • Since institutions are price takers, prices cannot change anything.

3. The state of rhetorical gain and loss:

   • Rhetorical Profit: If a firm sells goods at a price higher than the average cost of production, it has the opportunity to make a profit.
   • Loss: If average costs are higher than assessed, firms suffer.

4. Long-term conditions:

   • In the long run, new firms enter the market seeing profit opportunities.
   • As a result, supply increases and prices decrease.
   • Finally, all firms enjoy normal profit , ie whether there are special conditions of profit or loss.

---

example:

Suppose the production of paddy in a village has increased. If the demand is 100 quintals and the supply is also 100 quintals, the price of paddy is fixed at ₹200 quintals. Every farmer can sell paddy at this price. If profits are made in the long run, new farmers enter, resulting in a fall in prices and a restoration of equilibrium.

---

summary:

In a fully competitive market, prices depend on the aggregate demand and supply of the market. Every firm sells goods at this price, and a single firm cannot change the price. In the long run, whether there is a range of profits and losses, institutions operate at normal profits.

6. Assuming that the equilibrium price in Exercise 5 is higher than the minimum average cost of firms in the market, how will the market price change if firms are now freed to enter and leave?

Answer:  If the market equilibrium price in Exercise 5 is higher than the minimum average cost of the firms in the market and the entry and exit of the firms is freed, then the market price will change in the long run.

Entry and exit effects:

1. Profit Opportunities:

   • Since equilibrium price is higher than average cost, firms are making economic profit .
   • This profit opportunity will encourage new firms to enter the market.

2. Increased supply:

   • The entry of the new firms increases the total supply of the market.
   • an increase in supply would cause a depreciation in the demand-supply equilibrium.

3. Price drops:

   • More supply will cause prices to fall when the supply curve is large.
   • The equilibrium price falls in the long run to equal the average cost of firms.

4. The eviction of rhetorical gains:

   • New firms enter and evict rhetorical gains.
   • In the long run, firms enjoy normal profits .
   • Otherwise, if at any time price is below average cost, firms exit the market.

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Long term results:

• The market equilibrium price eventually equals average cost.
• The number of institutions increases, but the institutions make only normal profits in the long run.
• The rhetorical gains or losses do not last in the long run.

---

Graphic images:

1. Initial conditions:
   • Equilibrium price (P2) is greater than average cost (AC2).
2. Entry of new institutions:
   • the supply curve shifts to the left.
3. End state:
   • The equilibrium price (P2) equals the average cost.

---

example:

Suppose the average expenditure in a market is ₹100, but the equilibrium price of the good is ₹1 New firms enter and increase supply. Finally, the equilibrium price comes to a halt at ₹100, where firms make normal profits without making rhetorical profits.

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summary:

When firm entry and exit in the market are free, equilibrium price equals the average cost of the firm in the long run. New firms evict profit opportunities, thus eliminating rhetorical profits and stabilizing market prices.

7. What price will a fully competitive firm supply if there is no free entry and exit in the market? How is the equilibrium quantity determined in such a market?

Answer:  If there is no free entry and exit in a fully competitive market , the supply and equilibrium quantity of firms are affected. Under such circumstances, firms can maintain rhetorical gains (Economic Profit) or rhetorical losses (Economic Loss) for a long period of time.

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At what price will a fully competitive firm supply?

A fully competitive firm is a price taker , therefore—

1. The firm supplies the good at the price, where price (P) = average income (AR) = marginal income (MR) .
2. The quantity of production is constant at the point at which—$$\mathrm{<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">M</span></span>}\mathrm{<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">C</span></span>}<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">=</span></span>\mathrm{<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">M</span></span>}\mathrm{<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">R</span></span>}$$ i.e., firm’s profit has its highest point at the point where Marginal Cost (MC) equals Marginal Revenue.

8. How is the number of equilibrium firms determined in a market where entry and exit are allowed? 

Answer:  The number of firms in equilibrium in a fully competitive market with entry and exit is determined by the absence of long-term economic profit or loss. In this situation, each firm earns a normal profit .

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The process of determining the number of firms in equilibrium:

1. rhetorical gain or loss status test:

   • Rhetorical Profit:
     If firms make a profit by selling goods at a price higher than the average cost (Average Cost, AC), then new firms enter the market.

     • Entry increases supply.
     • Price decreases, until the rhetorical benefit disappears.

   • Rhetorical losses:
     If prices fall below average costs, firms suffer losses.

     • Some companies exit the market as a result of losses.
     • Supply decreases, and prices rise, until the damage disappears.

2. Long-run equilibrium:

   • In the long run, rhetorical gain or loss = 0 .
   • The number of firms is constant at the stage at which each firm sells goods at a price equal to the average cost.
   • On balance,$\mathrm{<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">P</span></span>}<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">=</span></span>\mathrm{<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">A</span></span>}\mathrm{<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">C</span></span>}<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">=</span></span>\mathrm{<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">M</span></span>}\mathrm{<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">C</span></span>}$
     (price = average cost = frontier cost).

3. Total market supply:

   • The total supply of firms equals the market demand.
   • Total supply of firms = quantity supplied by each firm × number of firms.
   • If demand increases, new firms enter and increase supply. If demand declines, some companies leave.

4. Calculation of number of institutions:

   • In the long run, each firm produces a certain amount of goods.
   • In equilibrium, number of firms = total demand / unit supply of firms.

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Graphic images:

• By demand and supply curves:
  • When demand increases, new firms enter, the supply curve widens.
  • When demand declines, some firms leave, the supply curve narrows.

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example:

Suppose the average cost in a market is ₹100, and the firms produce an average of 50 units. Total demand is 10,000 units.

• Number of firms in equilibrium:$$\text{<span style="background: 0px 0px; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: inherit;"><span style="background: 0px 0px; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: inherit;">Number of Institutions</span></span>}<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">=</span></span>\frac{\text{<span style="background: 0px 0px; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: inherit;"><span style="background: 0px 0px; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: inherit;">Total demand</span></span>}}{\text{<span style="background: 0px 0px; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: inherit;"><span style="background: 0px 0px; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: inherit;">single supply of institutions</span></span>}}<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">=</span></span>\frac{\mathrm{<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">10</span></span>}<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">,\; 1999\; .</span></span>\mathrm{<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">000</span></span>}}{\mathrm{<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">50</span></span>}}<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">=</span></span>\mathrm{<span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;"><span\; style="background:\; 0px\; 0px;\; border:\; 0px;\; margin:\; 0px;\; outline:\; 0px;\; padding:\; 0px;\; vertical-align:\; inherit;">200</span></span>}$$
• If demand rises to 12,000 units, new firms enter and increase supply.

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summary:

In a fully competitive market with entry and exit permitted, the number of firms in equilibrium is determined by means of the absence of rhetorical profit or loss and the aggregate demand/supply equation. In the long run, institutions operate at normal profits.

9. How will equilibrium price and quantity be affected if consumer income—

(a) Does it increase?

Answer:

 (b) reduces?

Answer:

10. Using supply and demand lines, show how an increase in the price of shoes affects the price of a pair of socks and the quantity sold.

Answer:

 11. How will a change in the price of coffee affect the equilibrium price of tea? With the help of a figure, explain the earfall on the equilibrium quantity.

Answer:

12. How will a change in the price of a component used in the production of a good change the equilibrium price and quantity of the good?

Answer:

13. If the price of good (Y), a substitute for good X, increases, what will be the effect on the equilibrium price and quantity of good X?

Answer:

14. Compare the effect of demand-driven shifts on equilibrium when there is a fixed number of firms in the market with that of entry and exit.

Answer:

15. Explain with the help of diagrams the effects of rightward shifts of both demand and supply lines on equilibrium price and quantity.

Answer:

16. How would equilibrium price and quantity be affected if—

(a) Both the demand and supply lines shift in the same direction?

Answer:

(b) the demand and supply lines shift in opposite directions?

Answer:

17. In what case do the labor market supply and demand lines differ from the commodity market supply and demand lines?

Answer:

18. How is the optimal amount of labor determined in a fully competitive market?

Answer:

19. How is the wage rate determined in a fully competitive labor market?

Answer:

20. Do you know of any product that has a price ceiling in India? What are the consequences of imposing a price ceiling?

Answer:

21. The effect of demand line shifting is larger on price and smaller on quantity when the number of firms remains constant compared to the condition with free entry and exit. explain.

Answer:

 22. Assume that the demand and supply lines for commodity X in a perfectly competitive market are—

Think of the market as made up of similar institutions. Find the reason why the market supply of commodity X is zero at any price less than Rs. What is the equilibrium price of this commodity? What amount of X will be produced at equilibrium?

Answer:

23. Assume that firms producing commodity X have free entry and exit with the demand line of Exercise Also assume that the market consists of similar firms producing commodity X. The supply line of an organization is as follows:

(a) What is the significance of p = 20?

Answer:

(b) At what price will the market equilibrium of X be? Argue in favor of your answer.

Answer:

(c) Calculate the equilibrium quantity and the number of firms.

Answer:

24. Suppose the demand and supply lines for salt are given as follows.

q ^D = 1,000 – p q ^s   = 700 + 2p                  

(a) Determine the equilibrium price and quantity.

Answer:

(b) Now suppose that the price of an ingredient used in the production of salt increases and there is a new supply line

q ^s  = 400 + 2p 

How will equilibrium price and quantity change? Has the change been what you expected?

(c) Suppose the government imposed a tax of Rs. 100 per group on the sale of salt. How will this affect equilibrium price and quantity?

Answer:

24. It is assumed that the market rent is too high for the common man to afford. If the government steps in to help rental housing seekers by imposing rent controls, how will this affect the rental housing market?

Answer: