The competitive
equilibrium rent for a 1-bedroom apartment in
the city of Milan is currently €670 per month. Suppose
that the city council decides to enact rent control and
establish a price ceiling of €500 per month for 1-bedroom
apartments. Briefly explain whether rent control is likely
to make each of the following people better or worse off:
a. Someone currently renting a 1-bedroom apartment in
Milan
b. Someone who will be moving to Milan next year and
who intends to rent a 1 bedroom apartment
c. A landlord who intends to abide by the rent control law
d. A landlord who intends to ignore the law and illegally
charge the highest rent possible for his apartments