Adopts new law that forces landlords

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Reference no: EM131108333

Imagine the German parliament adopts a new law that forces landlords to give tenants six months notice before evicting them. Up to the reform standard apartments were rented for 500€ per month.

a) Explain - verbally and graphically - the effect on the housing market if the new law imposes a 50€ cost per apartment on landlords and tenants benefit by 50€.

b) Assume now that tenants benefit by 70€. Is the reform still necessary? Discuss your answer.

c) Do your results change when there are different types of landlords and tenants? Explain your answer

Reference no: EM131108333

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