The city council of a small college town decides to regulate rents in order to reduce student living expenses. suppose the annual market clearing rent for a two bedroom apartment has been $700 per month and that rents were expected to increase to $900 per month within a year. the city council limits rents to their current level. a) draw a supply and demand graph to show what will happen in the market for student housing after the control is enacted

You are the owner of a local honda dealership. unlike other dealerships in the area, you take pride in your “no haggle” sales policy. last year, your dealership earned record profits of $1.5 million. however, according to the local chamber of commerce, your earnings were 10 percent less than either of your competitors. in your market, the price elasticity of demand for midsized honda automobiles is 4.5. in each of the last five years, your dealership has sold more midsized automobiles than any other honda dealership in the nation. this entitled your dealership to an additional 30 percent off the manufacturer’s suggested retail price (msrp) in each year. taking this into account, your marginal cost of a midsized automobile is $11,000. what price should you charge for a midsized automobile if you expect to maintain your record sales?