Rent control and deadweight loss | Microeconomics | Khan Academy
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Published 2013-11-20
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All Comments (17)
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Really nice explanation of the market. Thanks for sharing it.
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I love these videos.
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I’m always impressed with how well you can write using a mouse
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Someone send this to Bernie Sanders lol
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Oh my god THANK YOU now i get it
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Do you know everything? I honestly didn't know you did economics stuff too!
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gr8 video!
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Thanks
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What I don't understand: 2 million square feet of apartments are built, THEN rent control is introduced. That 2M sq ft still exists, it doesn't disappear. Even though the price is reduced, apartment owners need to rent out that land or they straight up LOSE money all of the time. It makes zero sense that they would rent out less land and just leave 1M sq ft of land completely unused. No, they're going to keep renting out those apartments. Increasing marginal cost only makes sense for BUILDING NEW APARTMENTS, not renting out already existing apartments.
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is this rent control really going to be introduced?
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correct me if i am wrong isnt 1/2 x 1 x 1.5 =0.75
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Number One :D
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nice presentation! I also get instant flashback from university where they only teach Keynesian bullshit.. like the "broken glass window" thery and so on..
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Videos would be great if they were not so messy.
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You are overestimating the consumer surplus in the context of rent control. You are incorrectly assuming that all consumers to the left of the Q=1 line will rent, while those to the right of the line will not. But there is no reason to assume that someone whose marginal utility of 1sqft is 3.7 will rent for 2$ while someone whose marginal utility is 2.3 will not rent for 2$. More realistically, the flats at 2$ will be allocated to a variety of consumers, some of whom will only gain 0.3$ surplus, while others will gain 0.7$ or 1.9$. Some others who are willing to pay 3.9$ will not get a flat because of the shortage. To estimate the consumer surplus, it would be more accurate to draw a line from P=4$ to Q=1 and compute the area of the triangle under the line.
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I don't get that "supply of square foots" point. How it depend on price? Do you see how price hike lead to more housing in area? I do not. You can see some issues here. It is not free market, supply is limited with laws and obvious natural limits, so regulations cannot harm it. Its already broken.
