According to Statistics Canada, 522 140 apartments were rented in Montreal in 2016. That same year, 4% of apartments were empty. According to the Swiss Union, the average price for a 3 1/2 apartment in Montreal was $879. Let’s suppose that between 2015 and 2016, this price increased by 2%, so becomes approximately $900. To facilitate access to apartments, Mrs. Gagnon suggests we put a price ceiling of $850 Canadian as of January 2017. 1. Represent the equilibrium of the rental housing market in Montreal in 2016 using a supply and demand graph. 2. 2. On the same graph, represent the consumer surpluses and producers. You can use letters to designate areas corresponding to these surpluses. 3. On the same graph, represent the equilibrium of the rental market in Montreal in 2017, after the cap policy proposed by Mrs. Gagnon. 4. 4. Represent the surpluses of consumers and producers for 2017. 5. 5. How is the quantity of rented housing in equilibrium changing? 6. Why ? 7. 6. According to your answers to the two previous questions, what do you think of the 8. public policy proposed by Madame Gagnon? Ms. Breton is also an economist for the city. She criticized Mrs. Gagnon’s solution and proposed to subsidize access to housing for Montreal families in the form of a $50 discount per month for renters with the lowest incomes, as of January 1, 2017. Copy your graph from question 1 showing the balance of rental market in Montreal in 2016. Then represent the policy proposed by Ms. Breton for January 1, 2017. 8. How is the amount of rented housing in equilibrium changing? Why ? 9. Represent the surpluses of consumers and producers for 2017, applying the policy of Madame Breton. 10. According to your answers to the two previous questions, is it preferable, to encourage access to housing, to put in place the policy Mrs. Breton or Mrs. Gagnon? Why ? Mr. Tremblay proposes an alternative approach to facilitate access to housing and reduce the vacancy rate: subsidize homeowners rental housing, as of January 1, 2017. Copy your graph from question 1 showing the balance of rental market in Montreal in 2016. Then represent the policy proposed by Mr. Tremblay for January 1, 2017. 12. Represent the surpluses of consumers and producers for 2017, applying Mr. Tremblay’s policy. 13. How is the amount of rented housing in equilibrium changing? Why ? 14. According to your answers to the two previous questions, what do you think of the public policy proposed by Mr. Tremblay in terms of access to housing? Like Mr. Tremblay, Mr. Laroche thinks it would be better to consider a supply policy, rather than a demand policy. He proposes to tax vacant dwellings as of January 1, 2017. 15. Copy your graph from question 1 illustrating the balance of the rental market in Montreal in 2016. Then represent the policy proposed by Mr. Laroche for January 1, 2017. 16. Represent the surpluses of consumers and producers for 2017, applying Mr. Laroche’s policy. 17. How is the quantity of rented housing in equilibrium changing? Why ? 18. According to your answers to the two previous questions, what do you think of the public policy proposed by Mr. Laroche in terms of access to housing? 19. Is the result of the policy proposed by Mr. Laroche different from the result of the policy proposed by Mr. Tremblay? 20. Of the four solutions proposed, which one would you choose? Why?