The cities of Woburn and Peabody are five miles apart. Woburn enacts a rent control law that puts a ceiling on rents well below their competitive…

The cities of Woburn and Peabody are five miles apart. Woburn enacts a rent control law that puts a ceiling on rents well below their competitive market value. Predict the impact of this law on the competitive equilibrium rent in Peabody, which doesn’t have a rent-control law. Illustrate your answer with a demand and supply graph which doesn’t have a rent-control law. Illustrate your answer with a demand and supply graph.

 
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