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In many large cities, such as New York City and San Francisco, low-income households face the dual challenges of excessively high rents and a shortage
In many large cities, such as New York City and San Francisco, low-income households face the dual challenges of excessively high rents and a shortage of available housing units. A- One proposed solution to expand the housing market is by offering tax cuts to landlords. Using the supply and demand model, illustrate how such a tax incentive would function. Specifically, describe the effects of this policy on rental prices, market size, and overall surplus. [20p]
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