In an effort to provide more affordable rental housing for lowincome families, the city council of Collegetown decides to impose a rent ceiling well below the current market equilibrium rent. a....

In an effort to provide more affordable rental housing for lowincome families, the city council of Collegetown decides to

impose a rent ceiling well below the current market equilibrium rent.

a. Illustrate the effect of this policy in a diagram. Indicate

consumer and producer surplus before and after the introduction of the rent ceiling.

b. Will this policy be popular with renters? With landlords?

c. An economist explains to the city council that this policy

is creating a deadweight loss. Illustrate the deadweight loss

in your diagram.