here is the previous question, now solve the answers: Although adjustment to the equilibrium may take a long time in a stock-flow housing model,adjustment is fast under some circumstances, which makes for an easy analysis.This problemconsiders such a case and shows the effect of rent control.Suppose that the initial demand curvefor housing is given byp= 3H,where p is the rental price per square foot of housing and H is the size of the stock in square feet.Note that this equation gives the height up to the demand curve at any H.The flow supply curvefor housing is given byp=H+ 2,whereHis the change in the stock.Again, this equation gives the height up to the flow supplycurve at any value ofH.Note that the slopes of the two curves are1 and 1, respectively, a factthat allows simple answers to be derived below.(a)Compute the equilibrium pricep(the price at whichHequals zero).e(b)Suppose that prior to the demand shock, the housing market is in equilibrium, with a stockof sizeH= 1.Verify that the price in the market equals pwhen the stock is this size.eAfter the demand shock (e.g., arrival of the Cuban refugees), demand increases up top= 8 -H