A college town has two types of renters: townspeople and students.

There are 200 student renters who are willing to pay $500 a month for an apartment. Of the renters who are townspeople, 100 are willing to pay $600 for an apartment and another 150 townspeople are willing to pay $400. There are 240 identical apartments in the town.

a. What is the free market rent?

b. What would the rent be if there were no students?

c. Who causes high rents, apartment owners or renters?

d. A rent control law imposes a rent ceiling of $300. Suppose that at this low rent, no apartment owner will bother renting to students unless there is no one else to whom he or she can rent. Who gains from the rent ceiling? Who loses?