Explain briefly what would be expected to happen over time if binding rent controls were implemented and the price elasticity of supply of rental housing was highly inelastic in the short run (PEs = 0.10) but increasingly elastic in the longer term (after 10 years PEs = 0.85). Assume that the new ceiling price is 10% below the market clearing price so the change in price is -10%. Show your calculations to better explain what you expect to happen in the short run and in the long run.

(b) if the price elasticity of demand for rental housing was -0.20 would this offset or add to the problems foreseen in (a)

(c) In addition to any imbalance you foresee in the quantities supplied compared to the quantities demanded in the rental market briefly report in a few words some of the practices and consequences that you would expect to see in the rental market after the binding rent controls are applied.