Consider the market for rental housing in Yourtown. The demand and supply schedules for rental housing are given in the table.

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.
c. Suppose the maximum rental price is set equal to $500 per month. Describe the effect on quantity demanded, supplied, and exchanged in the rental-housing market.
d. Suppose a black market develops in the presence of the rent controls in part (c). What is the black-market price that would exist if all of the quantity supplied were sold on the black market?

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Price Quantity Demanded Quantity Supplied S per month) (thousands of units) (thousands of units) 40 50 60 70 80 90 100 80 1100 1000 900 800 700 600 500 73 70 67 65 60