Consider the market for single bedroom rental apartments in Hobart in 2021 as shown in the diagram below. Market for Single Bedroom Appartments in Hobart 2021 -Supply -Demand S850 5750

Consider the market for single bedroom rental apartments in Hobart in 2021 as shown in the
diagram below.
Market for Single Bedroom Appartments in Hobart 2021
-Supply
-Demand
S850
5750
$700
5650
SGOD
$550
5900
5450
Rent (S/week)
5400
5350
5300
$250
$200
$150
$100
550
5
10
15
20
25
30
35
40
Thousands of Single Bedroom Apartments Rented per month Consider that instead of a price ceiling the Tasmanian government introduces a subsidy of $150/week to renters of single bedroom apartments in Hobart. 1. Draw a diagram that that shows the effect of the subsidy on the on single bedroom rental apartments in Hobart. Explain what would happen to the price (rent) and number single bedroom apartments rented. 2.Calculate the consumer surplus and producer surplus to determine who is better and worse off with a subsidy of $150/week. 3.Is there any dead weight loss from a subsidy of $150/week?  If so calculate the size of the dead weight loss.

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