Suppose that the supply and demand schedules for rental apartments in the city of Gotham are given as : Monthly rent Apartments Demanded
September 3, 2020
Supposed that each of the following rows represents the choice faced by policy makers given the current set of U. institutions and technology.
September 3, 2020

A. If a city decides to use rent controls (a price ceiling) to “solve” the problem of high rent for the poor. State how each of the following will be affected. (compare these to the pre-rent control situation).

a. number of low rent apartments (quantity)

b. number of homeless

c. monthly rents (price) for the poor that find housing

d. black market payments for rent controlled apartments

B. Now the city sees rent controls produce a shortage of rental apartments. Suppose a city facing such a shortage of rental apartments eliminates rent controls. State whether the following will increase, decrease, or not change: (assume short run).

a. monthly rent (price of housing)

b. number of apartment (quantity of housing)

c. demand for housing

d. supply of housing

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