A central city imposes a rent control law that places a binding ceiling on the rent that
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A central city imposes a rent control law that places a binding ceiling on the rent that can be charged for an apartment. The suburbs of this city do not have rent control. What happens to the rental prices in the suburbs and to the equilibrium number of apartments in the total metropolitan area, in the city, and in the suburbs? (For simplicity, you may assume that people are indifferent as to whether they live in the city or in the suburbs.)
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The price ceiling will create excessdemand in the city which will sp...View the full answer
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