urban Econ

1. [12 pt: total] Consider the following two symmetric neighborhood model, composed of 100 students and 100 retired people. The rent premium curves for each group are shown in the graph below, for neighborhood A. RA . Rs {5 rent gap) $120 ................... d Students # of retired in A 50 61 70 77 100 a. Determine all stable and unstable equilibria. Identify using the letters above. b. Which points (a, b, c or (1) refer to mixed, segregation vs integration outcomes? c. Assume that the city management wants the number of retirees in neighborhood A to be always around 70 by providing a pricing/ tax mechanism (no quotas or other reserved room limitations allowed). Can you design such pricing scheme to ensure that always happens within a free housing markets economy