Price ($
per
month)
Quantity Demanded
(thousands of units)Quantity Supplied
(thousands of units)1100 40
1000 50
900 60
800 70
700 80
600 90
500 100
a. In a free market for rental housing, what is the
equilibrium price and quantity?
b. Now suppose the government in Yourtown decides to
impose a ceiling on the monthly rental price. What is the
highest level at which such a ceiling could be set in order
to have any effect on the market? Explain your answer.