The city of Greenville is concerned about rising rent for low-income households. Several policies being considered. Suppose there are a large number of construction companies, each with the identical cost function for building low-cost houses TC = 2500 + 400q +q2 where q is the number of low-cost houses a firm builds
Instead, suppose the government pays each firm $50 per low-cost house built. What will be the long run price of low-cost houses and how many will each firm build? How many low-cost houses will be built in total (assume again demand remains the same)? How many firms will serve the market?