The cities of Woburn and Peabody are five miles apart. Woburn enacts a rent control law that puts a ceiling on rents well below their competitive market value. Predict the impact of this law on the competitive equilibrium rent in Peabody, which doesn’t have a rent-control law. Illustrate your answer with a demand and supply graph which doesn’t have a rent-control law. Illustrate your answer with a demand and supply graph.

Leave a Reply

Your email address will not be published. Required fields are marked *