Question 2 noindent Price controls in competitive equilibrium Many cities have rent control laws, which place a price ceiling on rent. In this problem we will consider the effects of these policies. Suppose that in the city of Gotham, supply and demand for student apartments are given by the equations: S(P) = -200 + P D(P) = 1000 - 2P where P is rent. (A) In the space below, draw supply and demand and indicate the equilibrium price and quantity. Make sure you label everything! (B) Calculate the following: (i) Equilibrium price and quantity. (ii) Consumer surplus, producer surplus, and social surplus.(C) State how would the following affect equilibrium quantity and price: (i) Gotham reduces the cost of building permits for new apartments. (ii) A wave of immigration to Gotham results in more people looking for homes. (ili) Gotham reduces the cost of building permits, and there is a wave of new immigrants. (D) Now suppose Gotham imposes a $350 price ceiling on the rent for student apartments. (i) What is quantity supplied and quantity demanded? Is there excess supply or excess demand? (ii) Calculate consumer and producer surplus under the new law. How have these changed from (B)?