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Suppose the rent control (price ceiling)  in California will be nullified for a year and that market rents will now be institutionalized. Assume that all apartment units are of identical structure and so are offered at the same rent. To address the plight of the residents, especially those who may be unable to pay the market rent, an income subsidy will be given to all low-income households equal to the difference between the old controlled rent and the new market rent. 1. Use another diagram to show the additional effect of the income subsidy on the apartment market. What effect does it have on the market rental and quantity of apartments supplied in comparison to your answers to (a)

Suppose the rent control (price ceiling)  in California will be nullified for a year and that market rents will now be institutionalized. Assume that all apartment units are of identical structure and so are offered at the same rent. To address the plight of the residents, especially those who may be unable to pay the market rent, an income subsidy will be given to all low-income households equal to the difference between the old controlled rent and the new market rent. 1. Use another diagram to show the additional effect of the income subsidy on the apartment market. What effect does it have on the market rental and quantity of apartments supplied in comparison to your answers to (a)

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose the rent control (price ceiling)  in California will be nullified for a year and that market rents will now be institutionalized. Assume that all apartment units are of identical structure and so are offered at the same rent. To address the plight of the residents, especially those who may be unable to pay the market rent, an income subsidy will be given to all low-income households equal to the difference between the old controlled rent and the new market rent.

1. Use another diagram to show the additional effect of the income subsidy on the apartment market. What effect does it have on the market rental and quantity of apartments supplied in comparison to your answers to (a) 

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