Creates an upward sloping rent ceiling


Problem: In Ontario, the strict rent control system started in 1976 and modeled in Lecture 1 was replaced by a modified version in 2001. In the 1976 version, a landlord was required to maintain the same rent-controlled rent when a new tenant signed the lease. In the 2001 version, a landlord is allowed to reset the rent-controlled rent at the market rate when a new tenant signs the lease. The landlord cannot change the new rate until the new tenant moves out. Assume that this creates an upward sloping rent ceiling. Fully explain how the 2001 system is different from the 1976 system? How would you improve this system?

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Microeconomics: Creates an upward sloping rent ceiling
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