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Case study: rent ceilings in New York City. Suppose the demand and supply curves for rental housing units have the typical shapes and that the rental housing market is in equilibrium. Then, government establishes a rent ceiling below the equilibrium level.
A. What happens to the quantity of housing available?
B. What happens to the quality of housing and why?
C. Who benefits from rent control?
D. Who loses from rent control?
E. How do landlords of rent-controlled apartments try to get tenants to leave?
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