The city council of a small college town decides to regulate rents in order to reduce student living expenses. Suppose the average annual?market-clearing rent for a?two-bedroom apartment had been?$700 per month and that rents were expected to increase to ?$1000 within a year. The city council limits rents to their current?$700-per-month level.

Suppose the rent increase is due to an increase in demand. In the graph to the right for?apartments, illustrate what will happen to the rental price of an apartment after the imposition of rent controls.

?1.) Using the line drawing tool?, draw a new demand curve to illustrate the increase in demand. Label this curve?D'.

?2.) Using the point drawing tool?, indicate the price and quantity of apartments with the rent controls. Label this point?'Market Price and?Quantity'.

Carefully follow the instructions?above, and only draw the required object

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