1. Suppose the Government wants to make housing more affordable for low-income groups, and puts a binding price ceiling on rents that is below the market equilibrium. Draw a diagram that shows how this price ceiling would affect the rental housing market. Using handwritten sentences, explain the key features of the diagram. What is the likely impact going to be on the quantity of rental properties demanded, and the quantity of rental properties supplied?
2. How are the concepts of deadweight loss, market equilibrium, and producer surplus related to each other?